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Are you considering filing for bankruptcy? If so, seek the advice of experienced Chapter 11 Attorneys in Tampa who will help you through the process and make sure you select the appropriate type of bankruptcy protection.
When your business debts become overwhelming, you need to decide whether you wish to keep your business open or shut it down forever. If you want to keep it open, you will want to file for Chapter 11. If you are shutting down, file for Chapter 7.
Chapter 7
If you believe your business is not salvageable and you just want to shut it down, then Chapter 7 may be the option for you. If your business files for Chapter 7 bankruptcy, then the bankruptcy trustee will take control of the assets of your business and sell them. This money is then used to pay your creditors. This will leave you with nothing left to operate.
If your business is a corporation or a partnership, then you will not be allowed to eliminate your debts in Chapter 7. Only incorporated businesses may eliminate their debts in Chapter 7. If your business is a corporation or partnership and the sale of its assets do not pay off all the debts to creditors, then your business will still be responsible for all remaining debts if your business begins operating again. This is not the case with Chapter 11, where debts are eliminated, but, in some cases, they are not paid off completely.
Chapter 11
When you file for Chapter 11, the bankruptcy protection will allow you to reorganize your debts and pay them off. Your company will enter a repayment plan so you are able to manage your debt without it becoming too overwhelming. Chapter 11 bankruptcy will prevent your creditors from all calling in loans at the same time. Is your business a corporation? If so, your stockholders must agree to the repayment plan. If your creditors and stockholders object to the plan, the court may still approve it if it is reasonable. However, the bankruptcy court must approve your plan.
If you think your business would benefit from a time frame that allows you to pay off your creditors while still earning income, then Chapter 11 may be the right path for you.
One drawback of filing for Chapter 11 bankruptcy emerges if you do not want the court involved in your business decisions. Under Chapter 11, the bankruptcy court has the power to approve some of your decisions, especially those involving a large sum of money. In those cases, your bankruptcy trustee and the court may need to grant consent. If you are not willing to give up this control, then Chapter 11 Bankruptcy may not be for you.
Chapter 11 business bankruptcy has complicated laws, and you will need a skilled business bankruptcy lawyer to help you navigate the process. For more information, contact the chapter 11 attorneys in Tampa of Robert Savage at 813-200-0013.