What Small Businesses Should Know About Chapter 11 Reorganization
Chapter 11 reorganization provides relief for businesses who are in a financial hotseat. From buying operating expenses to making payroll, operating a small business can bring on tons of stress upon a person. The ability to pay creditors is a huge concern for many small business owners and sometimes the debt is so immense that they worry if the business will be able to stay afloat. This article will address what small business owners need to know about reorganizing and restructuring their business with Chapter 11.
- Chapter 11 is a Strategy, But Not the Only One
Chapter 11 is a great strategy to help your business get back on its feet financially. But, it’s not the only one. Sometimes, a non-bankruptcy workout can help as well, where you deal with your creditors outside of bankruptcy to get more favorable payment arrangements or other relief.
- Chapter 11 Does Not Terminate Your Business
As mentioned in our other article, Chapter 11 does not end your business operations. Rather, it restructures it. With a plan of reorganization, the business can repay some of the debts it has incurred without worrying about creditor harassment because of its collection efforts, and maybe have longer to pay off the debt than it would have otherwise.
- The Business Does Not Cease Operations
If your business files Chapter 11 bankruptcy, this does not mean that you have to stop business operations. You can remain in business as a “debtor in possession” and still control the business and its assets.
- Even Though the Business is Struggling, Bankruptcy is Not Free
The U.S. Bankruptcy Court for the Southern District of Florida requires fees to be paid upon filing for Chapter 11 bankruptcy. And since Chapter 11 is a fairly complicated process, you will most likely need an attorney, and therefore attorneys’ fees.
The clerk’s summary of fees shows that a Chapter 11 petition fee is $1,167.00 in addition to an administrative fee for $550, as listed on the U.S. Bankruptcy Court Fee Schedule.
- An Attorney is Always Advised to Walk You Through the Process
To make sure that the business has the best chance for restructuring and has the best representation possible, the skill of an experienced West Palm Beach Chapter 11 Bankruptcy attorney is always advised.
Yes, an attorney will also charge legal fees, but the attorney will be your best chance of getting the business’s debts restructured and keep the business running to emerge successfully reorganized after bankruptcy.
Chapter 11 Bankruptcy is Your Choice
As mentioned above, the reorganization plan may not be the best option for your business. Filing for Chapter 11 Bankruptcy is not a requirement, it is simply a strategy to help your business recover financially and remain in business. Be sure to explore all options and work with an attorney who can help you discover them.
If You Feel the Need to File for Chapter 11 Bankruptcy, Contact the West Palm Beach Chapter 11 Bankruptcy Attorneys at Kelly, Fulton & Kaplan
When you’re constantly worrying about whether your business will survive because of the collection activity taking place and it has become unbearable, contact the West Palm Beach Chapter 11 bankruptcy attorneys at Kelley, Fulton & Kaplan for a consultation at 561-264-6850. We will help you explore all of your options, whether that means restructuring your business debts or working on another option that best suits your needs.