For a business, a ringing phone is usually a good thing. But if it’s a bill collector on the line every time, that phone’s ring can sound like a death knell.
The good news is it doesn’t have to – Chapter 11 of the U.S. Bankruptcy Code protects businesses from creditors by allowing the business owner/debtor to restructure his or her finances under a new debt repayment plan, while maintaining ownership and control of the business assets and continuing to run the business.
When approved for Chapter 11 Bankruptcy status, it is possible for a business owner to retain possession of the business and its assets, acting as a trustee. During this period of restructuring, the debtor may acquire new financing to keep the business afloat, while agreeing to new terms with his creditors which give them incentives to lend, such as first priority on future income.
Depending on the size of the business and the complexity of the situation, emergence from Chapter 11 could take months or years. At the Law Offices of John A. Foscato, S.C.
, we have extensive experience with bankruptcy scenarios for individuals and businesses of all types, and we look forward to advising you on what your most advantageous options might be.