In the last recent years, the instability in the U.S. market dealt significant impact in the lives of millions and millions of Americans. While the nation is now slowly recovering from this downturn, much of the population still remains affected by the financial crisis. Among those severely affected by the recession are business owners. Many of these people are left with few options, and some still face the threat of having to close down their businesses for good.
An option available to these businesses is delineated in chapter 11 of the U.S. Bankruptcy Code. According to the website of Erin B. Shank, P.C., many business owners favor Chapter 11 bankruptcy because it allows them to reorganize and repay their debts while maintaining operations. Basically, filing a Chapter 11 petition can be granted a reorganization plan enabling business owners to repay their debts over a specified time period. While following this reorganization plan, business owners can successfully continue on with their operations and earn profits to help chip away at their debt.
There are some cases when a court might require a business to have some assets or properties liquidated in order to successfully cover their debt. This can effectively force a business to downsize in a very significant way. As a result, the website of Erin B. Shank, P.C. emphasizes that a Chapter 11 bankruptcy is most suitable for businesses with significant assets and income.
A Plano bankruptcy attorney may let you know ahead of time that another hurdle to a Chapter 11 bankruptcy is the amount of time it takes to process the petition. It will also require a petitioner to pay substantial fees that is at least around $500. Still, even with these concerns, a Chapter 11 bankruptcy can provide businesses the opportunity to pay off debt and keep their doors open to serve their clientele.