A small business owner might choose to file for Chapter 11 bankruptcy rather than Chapter 7 for many compelling reasons. Under Chapter 11, you can work out a plan to reorganize your business and pay off debts without the need to liquidate assets and shut down operations.
By comparison, Chapter 7 bankruptcy usually requires businesses to sell off assets to pay their creditors and ultimately shut their doors. Businesses filing for Chapter 11 expect their long-term profits to be greater than the value of their assets after liquidation. They view Chapter 11 bankruptcy, also known as B2B bankruptcy, as a means of debt relief that allows them to get through tight cash flow periods, or whatever financial distress they are experiencing, and emerge in much better shape.
Similar to Chapter 13 bankruptcy, which is not available to businesses, Chapter 11 allows business owners to reorganize their debts and work out a payment plan that enables them to pay off their debts within a certain period of time. As part of this reorganization process, many business owners take the opportunity to renegotiate more affordable payment terms with debtors and more favorable contracts with suppliers, which ultimately strengthens their companies.
During the repayment period, all collection activities cease, the business owner retains possession of the assets, and the operation continues to generate revenue. So if a small business owner finds it a struggle to pay bills and satisfy debt obligations, Chapter 11 buys some time to turn things around to regain a better financial footing.
Since filing for Chapter 11 in New York is extremely complex, you need a knowledgeable, respected law firm, such as Hayward, Parker & O’Leary, Esqs. with decades of experience handling bankruptcy cases.
Michael O’Leary is experienced consumer bankruptcy lawyers who can explain the many rules and requirements of Chapter 11 and strategically guide small business owners through the maze of options and issues involved with the filing and debt repayment process.
If you are interested in filing for Chapter 11 bankruptcy in Newburgh, Middletown, or the counties of Orange, Sullivan, Ulster or Dutchess in New York, we urge you to call the law firm of Hayward, Parker & O’Leary Esqs. at 845-343-6227 or contact us online to schedule your free bankruptcy consultation.