Chapter 11 bankruptcy is a restructuring and rehabilitation type of bankruptcy. Unlike liquidation bankruptcy your company will not have to close its doors and sell off everything that is left to pay off your debts. Instead, your company will change the way it runs and slowly pay off a portion of your debt. In exchange, your debtors will agree to discharge the remaining debt and allow your company to start over in much better financial setting. Your company should always hire a Chapter 11 law firm to first decide if bankruptcy is the best option and then walk you through the restructuring process. There are several different types of bankruptcy, so what advantages does Chapter 11 Bankruptcy have?
- Easily the top advantage of Chapter 11 is that it allows your company to stay open. Unlike a liquidation bankruptcy, Chapter 11 will allow your business to stay in business which means protecting the company that you have put years of work into and keep your employees working. It is very important that you hire an experienced Chapter 11 lawyer as this type of bankruptcy is the most complicated type of bankruptcy. Experienced Chapter 11 attorneys can help you work through the steps your debtors require before they will agree to restructuring your debt. Hiring the wrong lawyer can mean being denied Chapter 11 and being forced into liquidation.
- You can protect your company’s good standing because your company will still pay off some of its debt. Any type of bankruptcy is going to affect your company’s credit score. However, since in Chapter 11 some of your debt is repaid and only a portion of your debt is, this type of bankruptcy is less damaging to your credit.
- Avoid collection phones calls. As soon as you hire a Chapter 11 attorney, they will send a letter to all of your debtors informing them that you are filing for bankruptcy.
- Pay off your debt over a longer period of time and pay less. When you cannot pay a creditor they want their money, and they want it as soon as possible. When you file for Chapter 11 bankruptcy, you and your creditors agree on a payment plan that will work for everyone involved. This agreement will give you a longer period of time find the money to repay your debt.
- There is no type of debt that cannot be discharged under Chapter 11 bankruptcy. Student loans and back child support can never be eliminated by bankruptcy. Since Chapter 11 bankruptcy can only be filed by companies, it means that any debt your company has can be paid off or discharged under Chapter 11.
If your company is in Florida, hire a Miami Chapter 11 bankruptcy attorney for advice about filing bankruptcy. Chapter 11 is a complicated bankruptcy process, and Chapter 11 lawyers are best qualified to help you work through the process.