If you’re a small business owner, you’re going to want to do everything in your power to ensure that you remain in operation, even amid potential financial obstacles. Thankfully, legal processes such as Chapter 11 bankruptcy can provide your business with the necessary protection should you ever face difficult times. With Chapter 11, you will be able to reorganize your debts while keeping your small business up and running.
What is Chapter 11 Bankruptcy?
When a small business encounters financial difficulties, small business owners can file for Chapter 11 bankruptcy. This type of bankruptcy allows one’s business to remain open while they work on a court-approved plan to repay creditors over time. Creditors grant the business immediate protection through an “automatic stay.” This prevents lawsuits and foreclosures from encroaching on the business, giving owners time to outline how their debts will be restructured.
How Chapter 11 Helps Small Business Owners Stay in Control
Having to file for any form of bankruptcy can make small business owners feel as if they’re losing control. However, Chapter 11 offers them a path that allows them to regain control and preserve their business and dignity.
Keeps the Business in Operation
Unlike other forms of bankruptcy, which require small business owners to halt their operations, such as Chapter 7, Chapter 11 allows them to keep their doors open and generate revenue that can alleviate their financial struggles.
Debt Restructuring
Under Chapter 11, small business owners in debt are allowed to restructure their obligations under court supervision. They formulate a plan that outlines how they will repay their creditors and potentially extend deadlines.
Protection from Creditors
When Chapter 11 is filed, an automatic stay is put in place, preventing foreclosures and possession of businesses and holding off creditors.
At Todd Cushner & Associates, we’re committed to helping you protect your small business every step of the way. For more information about protecting your small business, please call us today at (914) 600-5502.
