Times of financial crisis can make you feel uncertain about the future. This can be quite stressful when a business is going under. You may have worked hard to start this business and keep it afloat in the meantime. If your business goes out of business, you may lose all your money and your employees can lose a job opportunity. With all this on your mind, you should seek bankruptcy proceedings. By claiming bankruptcy for your business, you may be able to keep it open and running while paying back creditors. This can give you the opportunity to keep your business running and hopefully continue to do so. By doing this, it may provide you the opportunity to keep your business afloat instead of closing it down.
How do I file for a business bankruptcy?
To begin the process for business bankruptcy, you will go through Chapter 11 proceedings. To do this, you will have to file a bankruptcy petition that includes a financial statement, a list of all assets, a list of liabilities and a statement of any outstanding contracts or leases. When the paperwork is filed, an automatic stay will go into effect to help protect you. 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. This can alleviate some of the stress you are feeling during this process. A meeting of creditors will occur. This is when the creditors you owe the most money to will be able to meet with you and your attorney to learn more about the reorganization plan you have come up with to fix your financial situation. This plan is made with your attorney to continue paying your operation 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 5 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, you will send a constant stream of payments to your creditors over time. 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.