Restructuring And Saving Your Business Through Chapter 11 Bankruptcy
Business restructuring through Chapter 11 bankruptcy can be available to small businesses. While large corporations are the ones that make the news for obtaining relief through Chapter 11, small businesses may not have the same chance of regaining profitability.
Mahaffey & Associates, has assisted business owners throughout northwest Ohio with difficult bankruptcy decisions. After learning about your unique situation, our bankruptcy lawyers will analyze your debts and discuss legal options. We offer candid counsel on the benefits and costs of Chapter 11 restructuring plans versus Chapter 7 total liquidation, so you can make informed decisions.
Requirements For Pursuing Chapter 11 Bankruptcy
Most types of businesses and individuals would be eligible to file for Chapter 11. There are no limits on debt or income. That being said, Chapter 11 is not easy, and it is certainly not right for every business or individual. Here are some practical requirements and limitations to keep in mind:
- If you are filing on behalf of your business, you need to be sure that your business model is sound and that your business either is profitable now or can regain long-term profitability
- You need to be willing to have major business decisions overseen and approved by the bankruptcy court (or an appointed trustee in some cases)
- You need to be able to restructure your debts and repay creditors in a court-approved repayment plan, which means you will need the cooperation of your creditors
- You need to be able to afford the ongoing legal fees and court costs associated with Chapter 11, which tend to be higher because more oversight is needed and because the cases are sometimes open-ended
While Chapter 11 is more difficult and more involved than other types of bankruptcy, it may still be the right option for you. The best way to make that determination is to speak with an experienced attorney.
Benefits And Drawbacks Of Chapter 11 For Your Small Business
Chapter 11 reorganization is a strategy that comes with the advantage of extra time to renegotiate debt obligations with creditors. A partnership, which generally has fewer bankruptcy options, may take advantage of Chapter 11 if there is a chance it can survive and regain profitability.
The drawbacks relate to costs, which are typically higher. If you see a route to become profitable again, the added costs could be worthwhile. However, Chapter 11 bankruptcies are often dismissed and later converted to Chapter 7 because there is little chance the business will become profitable.
Learn More About Bankruptcy Law
Business bankruptcy is a way to insulate you from personal liability for business debts. Our experienced bankruptcy attorney can assist you through the bankruptcy process.
To schedule a free consultation, please call us at 419-741-0111. You can also send us a message online. We can arrange to meet with you at our conveniently located office in Sylvania. Evening and weekend appointments are also available upon request.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.