Chapter 11 bankruptcy is a debt relief option for business owners. Commonly known as “reorganization bankruptcy,” Chapter 11 holds off creditors while you work toward getting your business to a more financially healthy state.
There is often a negative connotation with filing for bankruptcy, but the reality is that it can be a boon and a necessary step toward success. By understanding exactly how Chapter 11 bankruptcy stands to affect your business, you will be able to proceed with confidence.
Will you be able to continue business as usual?
During the New Jersey bankruptcy process, creditors and federal debt collectors cannot solicit payment as usual. You will remain in full possession of business interests and have complete control of operations. While you should take this time to restructure your business for future success, the consumer-facing aspect of your operation can continue uninterrupted.
How will bankruptcy benefit your business?
Bankruptcy is an option for individuals and businesses who are unable to pay their debts. Upon emerging from Chapter 11 bankruptcy with a reorganized business structure, you will present a repayment plan to a committee of creditors as proof of your newfound ability to make good on your debts. The period of relief offered by bankruptcy benefits you by giving you the breathing room you need to get back on your feet.
For the most part, Chapter 11 bankruptcy itself has little effect on your business operations. Instead, it provides an opportunity to revamp your strategy while still conducting business so that you can emerge with a plan for settling any outstanding debts.