As an Indiana business owner, you’re undoubtedly no stranger to facing problems head-on and rising above a challenge. Whether you’ve been in business less than 10 years or for several decades, the time and effort it took to build a successful company inspires you to persevere when problems arise, especially if those problems are financially related.
Any number of issues can spark a financial crisis in your business. The good news is that most money problems are temporary. However, some situations are definitely more serious than others. Not making a projected sales quota one month is concerning but not as worrisome as falling behind in your mortgage for several months in a row. If you’re facing a serious financial crisis, it’s a good idea to explore debt relief benefits, such as Chapter 11 bankruptcy.
Chapter 11 bankruptcy can help a business stay afloat
Filing for bankruptcy as a means of debt relief can be a valuable financial tool to help overcome an existing financial problem and to lay the groundwork for a stronger financial future by wiping the slate clean and starting afresh. There are numerous types of bankruptcy, and each type carries its own eligibility requirements. The following list includes basic facts about Chapter 11, often used by business owners to avoid having to shut down during a financial crisis:
- It’s known as a “reorganization” bankruptcy.
- As a business owner, you may propose a plan to your creditors for approval.
- You may also opt to have lenders propose the plan.
- Terms of the plan are subject to your fulfillment of its obligations.
- Your business may continue to operate as you navigate Chapter 11 proceedings, provided your case doesn’t involve fraud or gross incompetence.
- It differs from Chapter 7, which typically requires complete liquidation of assets.
Being able to remain in control of operations for your business under a Chapter 11 bankruptcy plan means that you can continue to generate cash flow, which would provide additional funds to help you pay off your debts.
How to know which type of bankruptcy best fits your needs
As an Indiana business owner, you understand that no two businesses, and, therefore, no two financial situations are exactly the same. The fact that there are numerous types of bankruptcy means that you can choose the most viable option to fit your specific needs and long-term business goals.
Chapter 11 bankruptcy is more complex than Chapter 7 or Chapter 13. Most business owners considering filing for Chapter 11 do so under the consultation of experienced financial advisers and others who are well-versed on U.S. bankruptcy codes and laws, in order to determine a best course of action in a specific set of circumstances.