Chapter 11 bankruptcy is also known as business bankruptcy because it is used by business owners to benefit their business. When their business is failing and they need the financial support to continue to run their business, they can file for Chapter 11 bankruptcy. Through this process, they may be able to provide a better financial future for their business. Business owners never want to see their business fail. They have put a lot of hard work and hard-earned money into their business. Because of this, you should consider the use of the Chapter 11 bankruptcy process to fix your situation. Business bankruptcy was made to keep the business open while trying to fix the financial situation.
How does the process begin?
To begin the process, you will need to file a bankruptcy petition. In this petition, it will include a financial statement, a list of all assets, a list of liabilities and a statement of any outstanding contracts or leases. Once the paperwork is filed, an automatic stay is put into effect. With this in place, you will be given the space you need to work on your finances and will not have to deal with the harassment of creditors.
Who is at the meeting of creditors?
A meeting of creditors will occur when the creditors you owe the most money to will be able to meet with you and your attorney to find out about your reorganization plan. This plan is made with your attorney to continue paying your operating costs while paying off debt at the same time. The plan must be approved by the bankruptcy court to ensure your status. Debt payments that your business built up are restructured. This means that these payments will now be paid throughout the course of a five-year plan.
When you are granted Chapter 11 bankruptcy, it will stop the shutdown of your business by any creditors, vendors or banks. Instead of sending all income to those you owe money to, claiming bankruptcy will allow for a slow stream of payments to your creditors. This will allow your business to make a revenue stream. Chapter 11 bankruptcy also allows businesses to keep their line of credit and to receive any money owed to it. Insurance money from an open claim is allowed to remain flowing. Since the main goal of Chapter 11 bankruptcy is to allow a revenue stream for your business, your business will remain open and operating to create a profit.
Before taking any sort of legal action, it is important to discuss your legal matter with an experienced attorney. Contact The Radol Law Firm to discuss any divorce and family law matters you may be faced with.