When individuals are going through tough financial times, they can turn to bankruptcy to help them during these times. Individuals can file for Chapter 7 or Chapter 13 bankruptcy to work toward fixing their current financial situation. However, when businesses are struggling financially, they need an outlet to turn to as well. Chapter 11 bankruptcy is often referred to as business bankruptcy because it is used by businesses. For this bankruptcy process, it allows business owners to keep their businesses open and running while they are going through the bankruptcy process. This is beneficial for business owners because they do not have to close their business. They can continue to allow their employees to work and have their business remain open to the public. By allowing a business to remain open, it can help to create a revenue stream. As consumers come in to buy new items, the business can pay back their debt slowly while continuing to operate. It can also prove to be beneficial since it allows employees to keep their jobs and keep working. They will not have to look for other jobs during this process since the business they work at will remain open for business. Chapter 11 bankruptcy is the main procedure businesses use to plan their finances and fix their financially difficult situation.
Business owners never want to see their businesses fail since they put so much time and effort into them. Chapter 11 bankruptcy can help them keep their dream alive. To begin the process, you should file a bankruptcy petition. This petition will include a financial statement, a list of all assets, a list of liabilities and a statement of any outstanding contracts or leases. When the paperwork is filed, an automatic stay is put into effect just as it is for individual bankruptcy processes. With the automatic stay in effect, business owners will be given the space they need to work on their finances by avoiding the harassment of creditors about their debt. A meeting of creditors is attended by the business owner. The creditors you owe money to also have the option to attend this meeting. At this meeting, your reorganization plan will be presented to them. The plan must be approved by the bankruptcy court. Debt payments that your business built up are restructured, meaning that these payments will now be paid throughout the course of a five-year plan.
Matters related to bankruptcy and estate planning are very significant in one’s life and require the services of an experienced attorney. Our firm proudly serves clients throughout Rockland County and New York State. If you need effective legal guidance, contact Koplen Law today to schedule a consultation.