It takes a lot to make a small business succeed. From a strong business idea to securing investors to earning a profit, success often does not come cheaply or quickly. Over time, you may find that your business is no longer able to manage financial obligations effectively. You are behind on payments, creditors are starting to call, and you ultimately see no way out.
At this point, it may be necessary to seek the protection of Chapter 11 bankruptcy. This type of bankruptcy uniquely suits businesses, and you may find that it is the most prudent way to secure a stable future for your company. If you are overrun by business debt, you will benefit from an explanation of how Chapter 11 could be right for you.
What to expect from the Chapter 11 process
One of the main reasons that people do not file for bankruptcy is that they have misconceptions about the process and what will happen. It is beneficial to know what to expect from the process. If you seek the protection of Chapter 11, you will walk through the following steps:
- Filing the bankruptcy petition
- Developing a reorganization plan
- Receiving confirmation and discharge of debt
Once you know what will happen throughout the entire Chapter 11 bankruptcy process, you may feel more prepared for the process ahead. Additionally, a willing petitioner is less likely to encounter issues with the petition itself or during the bankruptcy process.
When it comes to your reorganization plan, your first step is to work to renegotiate as many of your debts as possible. The goal of bankruptcy for your business is to become profitable again, and this is the first step in reaching that goal. Since you are under the protection of bankruptcy, your reorganization plan may allow you to pay less on your owed balances without fear of further harassment from creditors.
Is a healthy financial future in reach?
Filing for bankruptcy does not mean that you must close the doors to your business, nor does it mean that you will lose all of your business and personal assets. There are many misconceptions about the bankruptcy process, but you would be wise to have the correct information regarding all of your options. Despite what you may think you know about the process, bankruptcy could be the key to a stronger financial future for you and the business you worked so hard to build.