Chapter 11 bankruptcy is a bankruptcy option that can allow the business to stay in business while it restructures and pulls itself out of debt. Businesses who are facing closing their doors and wondering what to do should be familiar with the benefits of Chapter 11 bankruptcy.
Avoids total liquidation of the business
The Chapter 11 bankruptcy allows the struggling business to stay in business while it reorganizes. The business can generally keep its doors open while it seeks additional capital and renegotiates some of its obligations as it is working out a reorganization plan with the bankruptcy court.
Provides more time to develop and file a plan
The Chapter 11 bankruptcy process allows the struggling business time to develop and file a repayment plan. With the assistance of the bankruptcy court, the struggling business can develop a repayment plan that will allow them to keep their doors open.
Allows the business to reorganize what is not working
The Chapter 11 bankruptcy process allows the struggling business to eliminate what is not working which may mean, for instance, consolidating or renegotiating leases.
Allows you to retain control of business
The Chapter 11 bankruptcy process allows the business owner to retain control of the business as they work through the Chapter 11 bankruptcy process.
For a business that has fallen on hard times but wants to remain in business, Chapter 11 bankruptcy protection can be an option to consider. For that reason, struggling businesses should understand how the Chapter 11 bankruptcy process works and the benefits of the same.