No matter what the circumstances look like, the decision to file bankruptcy is never an easy one, especially for business owners who must stand by and watch the business they have worked so hard for suffer heavy, often life-changing, financial loss. The choice to take the leap to declare bankruptcy should never be taken lightly, as it requires a great deal of evaluation of one’s financial situation in order to decipher whether or not the benefits outweigh the disadvantages.
Is Bankruptcy a Good Fit for Your Needs?
If you are a business owner sinking in debt and have decided it is time for some relief, filing for chapter 11 offers a number of advantages. Yet like all forms of bankruptcy, Chapter 11 requires a certain amount of sacrifice. The process itself is very complex and takes time to resolve in entirety.
If you are ready to start new with a fresh slate, considering Chapter 11 may be your best, most viable option. However, it is important to examine whether or not filing would be beneficial for you in the long-run. Consider the following three signs to help determine if you may be on the right track in pursuing Chapter 11 bankruptcy as a business owner:
1. You feel confident you will not incur additional debt. Chapter 11 is often referred to as “reorganization” and is typically pursued by incorporated businesses as a way to handle their mounting, uncontrollable debt. Reorganization involves arranging a debt repayment plan with creditors and repaying them over a period of time, making the accumulation of any further debt problematic. Avoiding further debt will ensure you get the most out of the bankruptcy laws, that you are truly able to have a fresh start, and that you are capable of repaying your creditors as promised.
2. You want to keep your business afloat. If you have hopes for saving your business and do not want to see it go under, you may be a good candidate for filing for Chapter 11. Filing for this type of bankruptcy allows business owners to maintain their existing business and to rebuild their foundation by regrouping and practicing debt damage control. You will essentially need to present a revised business plan to the court and have it approved, and provide details for how you plan to operate the business from that point forward. It can be a challenging task, but is worth the effort if your end game is to keep your business running.
3. You believe your business will bounce back. It is important to note early on that filing for bankruptcy is not cheap or easy. The intricacy of the filing process, along with its often steep price tag, means you really have to be committed to its cause. You have to believe that after all is said and done, the time, energy, and money you invest in filing will be worth the effort. Forbes reports that around 25 percent of companies that apply for Chapter 11 survive down the road. That percentage may seem dismal, but working with the right attorney and creating an effective reorganization plan may increase your chances of bouncing back.
If you are interested in pursuing financial relief for yourself as well as your business, and are ready to explore bankruptcy as an option, it is time to speak with a qualified Cook County bankruptcy attorney who can advise you and address your questions and concerns. Call the Law Offices of Eric G. Zelazny today at 708-888-2299 for a personal consultation.