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Filing for Chapter 11 bankruptcy allows a business to restructure its debt. In most cases, a debtor can remain in possession of his or her business once a repayment schedule is agreed to by creditors. Usually, repayment schedules are designed to allow a business to repay its debts over a period of 3 to 5 years. The key, however, is convincing creditors to agree to the repayment schedule. If, for some reason, a business' creditors are not amenable to a proposed repayment plan, the company's assets could be liquidated. wantafreshstart.com works closely with business owners in Chapter 11 bankruptcy cases, consulting financial experts when necessary to determine debt, assets, and a payment plan creditors can support. We can help you and your business gain control of debt and begin the process of reestablishing financial stability while continuing day-to-day business operations.
For more information regarding Chapter 11 bankruptcy and how we can help you, contact the contact wantafreshstart.com today and schedule a free consultation.
Chapter 11 - Creating a Repayment Schedule
It's important for business owners to remember that their ability to file for Chapter 11 will depend on whether or not they can convince creditors to accept a repayment plan. In discharging debt, creditors will typically agree to a repayment schedule only if it ensures they will recover more money under it than if your business was simply liquidated. For this reason, it's important that you and your lawyer develop a plan that assures creditors they are better off under your Chapter 11 bankruptcy plan than if your business were liquidated.
Operating Your Business while in Chapter 11
While you still maintain the ownership of your business while in Chapter 11, it's important to understand that once a repayment plan is accepted, you are also acting as the fiduciary for your creditors. Consequently, you have a fiduciary responsibility to act in your creditors' best interest, keeping them informed of decisions and financial issues that directly impact their concerns. If, for whatever reason, you fail to properly manage your company's debt, your creditors can appoint a fiduciary in your place and take over your company. Similarly, if a company's debts should exceed its assets, ownership of a company can be transferred to creditors as well.
Questions? Contact a Chapter 11 Bankruptcy Attorney
There are a number of issues to consider when filing for chapter 11. Is your company a limited liability company, a partnership, an S corporation, or a C corporation? If one of the latter, how will stock holders be impacted? Do you have a partnership agreement? And, what about taxes - how should you report income, debt, and expenses? Our attorneys can evaluate your situation and determine how best to formulate a repayment plan acceptable to creditors. We discuss and explain tax issues and identifies steps you can take now that will reduce your liability in other areas of your business operations as well.
To schedule a free consultation to learn how we can help you, contact wantafreshstart.com.
