Handling Orange County Business Bankruptcy
If your business cannot thrive in today's market, you aren't alone. Thousands of small businesses across the country are finding it impossible to keep their doors open while the current credit freeze is in place. Falling behind on business debt is a stressful situation for everyone involved. Sometimes, the best course of action is to file for Chapter 7 bankruptcy, liquidate the business, and move forward with the next venture. However, when it seems as though you may be able to salvage your business if there is a manageable repayment plan for the debt, it can make a tough decision even more difficult. Fortunately, there is a way for you to retain your business, reorganize, and pay off much of what you owe - Chapter 11 bankruptcy.
Understanding Chapter 11 Bankruptcy - Orange County
When you file for a Chapter 11 bankruptcy in Orange County, there are a number of required documents that you must file. These include statements of your current assets, as well as information about liabilities, leases, and other financial information. Additionally, when you file, you will be required to put forth a repayment plan that satisfies priority and secured debts in full over the course of the repayment plan.
If you have unsecured creditors, they may not be fully repaid under the plan, however, care must be taken to ensure that the plan is equitable - creditors whose rights are compromised under the plan may have the right to vote on the plan and approve it. If you cannot get approval for your repayment plan, the bankruptcy may not go forward.
In the case of sole proprietorships and partnerships, you will also be required to attend an approved credit counseling course and obtain a certificate of completion. You will also be required to file the debt repayment plan developed during the course. If you are not a sole proprietor or a partnership, you may not have to file this additional documentation.
One of the ways in which Chapter 11 differs from a Chapter 13 is the role of the bankruptcy. While both require adherence to a strict budget, in a Chapter 11 bankruptcy, the business can generally continue to perform its essential duties, including making purchases and paying employees, without the consent of the court. In some instances, the business acts as its own trustee, and in others, the court may appoint a trustee to oversee the operations of the business. Chapter 11 bankruptcies are complex, and the proceedings can last for several months, and depending upon the size of the company and the amount of reorganization required, your Chapter 11 bankruptcy case may take over a year to work its way through the courts, during which, you will be required to make payments and stick to the payment plan, even if your case is still in process.
The decision to file for bankruptcy is never an easy one, because a business bankruptcy often affects more than just the individual owning the business. However, if you have a solid business model and just need the financial protection and restructuring that bankruptcy can provide, you may find that a Chapter 11 bankruptcy filing will allow you to emerge as a stronger, more viable company.
If you are not certain about whether or not filing for Chapter 11 will benefit your company, you should speak to one of our skilled Orange County Bankruptcy Attorneys today and arrange for a free initial case evaluation. We will help you weigh the pros and cons of filing for Chapter 11, and assist you with understanding how a Chapter 11 bankruptcy can help secure the future of your business.