Does your company need some assistance during a rough patch that’s leaving you with unmanageable debt? A reorganization of your business through the Chapter 11 bankruptcy process may be in order.
• A way to stay in business
• An opportunity to renegotiate debt repayment terms
• A way to preserve business assets
Reorganization is not:
• A vehicle to immediately eliminate debt
• A way to go out of business
• Total liquidation of your company’s assets
Here are ways that reorganizing your business can clear the way for a brighter and more profitable future.
Once you file a petition for Chapter 11, your company gets protection from debt collectors. This will allow you to focus on weeding out expenses that do not have a direct impact on your bottom line. You may be able to reduce taxes owed through by getting some of your debt discharged. The long-term takeaway is that your business will emerge from reorganization leaner and more efficient.
A New Plan
One of the perks of reorganization is that you can develop a new plan to tap new opportunities that can help you increase revenue. With the debt repayment pressure eased, you will be able to devote time and energy to a new direction for your company. This, in turn, can make your enterprise more competitive in the marketplace.
The bankruptcy court will want to see a record of creditors, a plan for reorganization, ways your business will cut costs, future sales projections and any changes planned for the future. The court will require ongoing business operation reports.
A variety of business types may file for Chapter 11, from corporations to sole proprietorships. When it comes to a new direction for your company, reorganization could be one of the best ways to move forward.