Three Benefits of Chapter 11 Bankruptcy in Orlando

If you are running a struggling business, you may want to consider filing bankruptcy to help manage its debt. When filing for bankruptcy, you have a couple of options. You can opt for Chapter 7 bankruptcy under which your business stops operating and its assets are being sold off to pay off the business’s debt. Also, you can pursue Chapter 11 bankruptcy in Orlando, which lets your business operate continuously and let it resolve its debts and liabilities at once. Usually, you can get more favorable terms when you negotiate with your creditors in bankruptcy court than when you negotiate with every creditor without court intervention. This post explores the benefits of Chapter 11 business bankruptcy:

Continuous Business Operation

While Chapter 7 bankruptcy leads to the wind-down of your operations and asset liquidation, Chapter 11 lets your business operation continue during the bankruptcy process. This means that you can keep your business, its customers, and goodwill. 

Automatic Stay

When you file for business bankruptcy, the automatic stay takes effect. This means that your creditors won’t be able to collect what your business owes them including getting in touch with you to demand debt payment. Also, they cannot seize secured assets and file a lawsuit to get money judgments for debts your business still owes the creditors. Violating the automatic stay can have your creditors facing fines and penalties.

With the automatic stay in effect, you can get relief from aggressive creditors and debt collectors. This way, you can thoroughly assess the financial situation of your business, negotiate with your creditors, and review your options as you prepare for reorganization. 

Emergency Operational Relief

After you file for Chapter 11 bankruptcy, an expedited hearing will be scheduled to hear emergency motions associated with your business and its bankruptcy. Such a hearing provides you with the chance to ask the court to authorize you to undertake some actions to run your business normally including paying wages and benefits to obligations such as vendor invoices, rent, and insurance premiums.
When you pursue this kind of bankruptcy, you can get emergency relief to operate your business regularly, giving your workers, customers, and vendors peace of mind that the bankruptcy process won’t cause significant disruptions to the business’s operations.  

If you are considering Chapter 11 bankruptcy to help manage debt and liabilities you cannot fulfill, a bankruptcy attorney can guide you through the bankruptcy process. A great lawyer is ready to take on a bankruptcy case regardless of how complex it is. 

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