We’ve all heard the saying that fortune favors the bold. A lot of entrepreneurs take that saying to heart, sometimes using their life savings to fulfill their dreams of starting a business that speaks to their interests. But a lot of businesses have fallen on hard financial times recently, leaving them wondering what they can do to protect their financial interests and perhaps save their business.
What Chapter 11 bankruptcy can offer you
We know that most business owners want to avoid bankruptcy, but sometimes that simply isn’t realistic. And bankruptcy relief can have a lot to offer you. For example, Chapter 11 bankruptcy can help you reorganize your debt so that it’s more manageable while allowing you to retain control of your business. If you’re successful in pursuing a Chapter 11 filing, then you may be able to recapitalize your business and discharge some debts.
Contrary to popular belief, Chapter 11 can actually open up a lot of lines of credit for your business. This is because under a reorganization plan you might be able to offer those new creditors first priority when it comes to the business’s earnings. This means that those creditors are more comfortable taking a risk on your business, even if it is facing financial trouble.
Also, if you’re facing legal troubles, then you should take comfort knowing that Chapter 11 bankruptcy places an automatic stay on most legal proceedings until the matter is resolved through the bankruptcy court or the lawsuit is reinstated later on. Either way, filing for Chapter 11 can buy you time to figure out how to address any pending litigation.
Speak to an attorney to learn more about Chapter 11
These are just a few of the benefits of filing for Chapter 11 protection. The process can be complicated, though, which is why it might be important for you to work with a legal professional who is skilled in bankruptcy law. Perhaps then you can become fully informed of the law and how it applies to your situation so that you can make the decisions that are right for you and your business.