Chapter 11 Bankruptcy
For the Small Business, Too
Usually when we hear about a company filing a Chapter 11 Bankruptcy, it’s a large corporation like Sears or JC Penny. But Chapter 11s are also available for the small business owner as well. These bankruptcies allow owners to restructure their company – essentially providing you the ability to step back and make sure things are better organized moving forward. The business owner in a Chapter 11 proposes a plan for becoming more profitable in the future, while the creditors are held at bay from demanding any payments. The purpose of this bankruptcy option is to allow business owners to restructure or renegotiate debts such as leases and other contracts. This reorganization plan is then voted on by the creditors and the court.
What is a Small Business?
A small business, for bankruptcy purposes, is one that has less than 500 employees and less than $2.19 million of debt at the time the bankruptcy petition is filed. In fact, the majority of Chapter 11 Bankruptcies filed are for the small business owner.
Our firm can review your company’s specific financial situation to determine if bankruptcy is truly the avenue you need pursue. Call our office today to schedule a free bankruptcy consultation.