If you own a company that is struggling to stay afloat financially then you may have looked into a variety of debt relief options as a way to stop creditor calls. You may have come across Chapter 11 Business Bankruptcy as an option. It may have appealed to you because it affords you an ability to restructure or reorganize your debts. You may wonder what this involves.
During the reorganization process, you’ll be appointed your own company’s Chapter 11 bankruptcy trustee. You’ll be entrusted to come up with a plan for restructuring your company so that it runs more efficiently.
The reason that they have you do this is that it serves as a good jumping off point from which your company can pull itself out of a financial slump and experience growth once again. This gives you extra time to pay off your company’s creditors.
If you’re a Webster small business owner, then you must meet certain qualifications to be eligible to file for Chapter 11 bankruptcy. Your Texas company must still be in operation and its debts must be $2,566 or less.
Businesses should also be more valuable in terms of “goodwill” than the assets that they own. A company should be able to justify that the positive equity that they’ve built in society would be lost if the company was forced to be sold.
During the reorganization process, the company’s owner continues directing their business as its debtor-in-possession. They’re assigned a fiduciary duty to responsibly manage the company’s finances enough for it to successfully pull itself out of debt. They’re also responsible for inventorying property, responding to claims and otherwise reporting to court administrators.
Filing for bankruptcy is an involved process. It’s not always abundantly clear on the surface whether it’s best for you to file Chapter 7, 11 or 13 or to do something else. There are many pros and cons to pursuing each of them. If your company is struggling to pay down debt and you’re unsure where to turn, then an attorney can help you decide what option is best for you in order to rebuild your business.