Business bankruptcy refers to Chapter 11 bankruptcy. This bankruptcy process has been known to help business owners keep their businesses afloat. When their businesses are suffering financially, they can file for Chapter 11 bankruptcy to help. Through this process, it will allow the business to remain open and operating on a daily basis. This can help the business to maintain a revenue stream while paying back debts to creditors. With this process, owners may be able to save their businesses.
What is the process like?
To begin Chapter 11 bankruptcy, you will need to file a bankruptcy petition. This 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.
At a meeting of creditors, 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 approved for Chapter 11 bankruptcy, it will stop the shutdown of your business by any creditors, vendors or banks. Instead of sending all the income you earn 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. 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.
If you are in need of experienced legal counsel for matters of personal injury, medical malpractice, medical device injuries, unsafe drug injuries, consumer protection, bankruptcy, SSD, or criminal law in New Jersey, please contact Tomes & Hanratty, P.C. and we will be happy to assist you.