It has come down to the wire. The expenses of your company far exceed its income. You have tried everything you know to make the business profitable, yet nothing works. Then you face the dreaded word: bankruptcy.
Chapter 11 Bankruptcy is a means of providing a breather from all the pressures of threats, duns, and collection agency night and day calls. What that means is that under trying circumstances, you now have time to reorganize under the bankruptcy court's supervision. It is not the best of all possible worlds, but it is a means of making everything manageable and offers the real possibility of salvaging a business that might otherwise fold.
Steps to avoid bankruptcy proceedings under Chapter 11
Filing bankruptcy must be the last step. There is information available about heading off the need for bankruptcy filing. If you have not waited too long, these resources can be invaluable for knowing the steps to take that will rescue your business before bankruptcy becomes unavoidable.
Seek help early on. The specter of bankruptcy does not loom up overnight. You can see the signs of declining sales and growing expenses long before the problem becomes potentially fatal. Many people ignore these problems in the vain hope that they will just “go away.” The result of that behavior is mounting stress, which only aggravates the problem.
When filing Chapter 11 Bankruptcy becomes unavoidable
* Learn all you can about the different plans under the legal code 11 U.S.C. 101 (51C) or 1121 (e).
* Do not assume that a lawyer will know all the Code that is relative to your case. Be prepared to ask relevant questions and understand all of your options.
* Seek professional help in preparing a restructure plan to file with the court.
* Be prepared to respond to counter-plans presented to the court by one or more of your creditors.
* Understand the difference between a restructure plan and a liquidation plan.
Before 2005, it was much easier for a person or business to file bankruptcy and simply walk away from debts. The new bankruptcy laws have closed most of the loopholes, making the business of filing for bankruptcy and repaying financial debts much more difficult. Forewarned is forearmed for those who learn all about the process and select responsible people to help them in the legal processes.
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