Just because you, as a business owner, have fallen on financial hard times doesn't mean that bankruptcy is inevitable. Professionals who work in bankruptcy law can inform business owners of their debt relief options before, during and after filing for bankruptcy.
Still, Chapter 11 or Chapter 7 bankruptcy protection may be the right step for a business. Consider the situation of Tennessee-based Oreck Corporation. The vacuum cleaner manufacturer has been in business since 1963. The company's founder, David Oreck, resigned at electronics giant RCA and literally made a name for himself in the business world.
People in Cleveland, Tennessee, have undoubtedly owned and appreciated an Oreck vacuum cleaner or air purifier.
Because of debt woes, however, the company filed for Chapter 11 protection in Nashville. The plan is to consolidate Oreck's debts and restructure the business.
Because Chapter 11 allows it to do so, the company will continue operations, and Oreck products will continue to be sold by retailers. A statement from Oreck indicates that a sale of the company is expected to follow the completion of the bankruptcy process, and the company headquarters and manufacturing operations will likely stay in Tennessee.
Some business owners may not qualify for Chapter 11 bankruptcy and instead have to file for Chapter 7 protection, which involves the liquidation of assets. Chapter 13 may also be an option for individuals. To know which debt relief path is right for your particular situation, it is important to speak with a bankruptcy attorney in your area.
Source: webpronews.com, "Oreck: Bankruptcy Filed, Buyer Sought," Sean Patterson, May 8, 2013