If you own a small business and are struggling with debt, you may be considering bankruptcy. While the bankruptcy process can be stressful, if you go through the process with an open mind and are willing to learn new financial habits, you may come out in a better position on the other side. Filing for Chapter 11 bankruptcy can help your business reorganize so that you can pay off your debts with the assets you have. By understanding more about how the process works, you can decide whether bankruptcy is the right option for your business.
How Chapter 11 bankruptcy works
Unlike other types of bankruptcy, Chapter 11 generally allows you to keep your business open and operate as normal. This means you’re still making money while paying off your debt using your current assets. With Chapter 11 bankruptcy, the court will create a payment plan that helps you pay off your debt using what you have. This reorganization provides you with a guide on how best to spend your assets, so debt is paid off in a timely manner.
One of the many benefits of Chapter 11 bankruptcy is that it prevents creditors from harassing you about payments. When you have your debt payment plan in place, you can feel relieved that you no longer have worries about the constant requests for payment from those to whom you owe money. While filing for bankruptcy should not be taken lightly, it is a way for you to pay off your debt so you can resume normal business operations and learn how to run your business more efficiently.
Recovering after bankruptcy
Many globally known businesses, both large and small, have filed for Chapter 11 bankruptcy and recovered once their debt was paid off. Paying off outstanding debt can feel overwhelming, but the bankruptcy process gives you a plan to get it done. Throughout the process, you can learn from your debt payoff plan and use that information to help you avoid getting into overwhelming debt in the future.
After bankruptcy, you may need to restructure the way your business operates. Cutting costs and finding ways to avoid future debt can help prevent your business from taking on too much debt in the future. You may wish to work with a financial planner who can help you learn how to better use your assets and how to find ways to increase your business’ earning potential.
Legal help during bankruptcy
When filing for Chapter 11 bankruptcy, it’s important that you have someone in your corner who understands how the process works. By consulting a Tennessee bankruptcy attorney, you can make an informed decision based on the specific needs of your business. Filing for bankruptcy can come with difficulties, but many small business owners find that it helps them get out of overwhelming debt.
