As New Hampshire business owners may know, there are times when a company’s profits decrease, and the owner may be losing money. When this happens, the business may fail. In order to reverse the course of events, it may be possible to take positive steps to reorganize one’s business and pay back creditors at the same time.
Filing for Chapter 11 bankruptcy is a tool that may help accomplish this plan and assist in making the company profitable once again. Requirements for this form of bankruptcy are not restricted by the size of the company or the amount of debt it carries.
The first step involves filing with the bankruptcy court. This prevents creditors from going ahead with any collection action such as foreclosure, liens or lawsuits. The automatic stay gives the business owner time to formulate a restructuring plan. The time limit for the stay is usually a maximum of 170 days but extensions are possible.
This restructuring plan is the way the business owner expects to make his or her company profitable once again. It may involve selling assets or bringing in new customers and income. The plan may offer business debtors a way to pay back loans by extending the repayment time. Creditors may be able to contest the company’s plan, but the court decides whether the plan is functional after hearing all sides. Once approved, the owner is able to oversee the operation of the plan. However, if he or she is unable to do that, a trustee might be appointed.
Filing for Chapter 11 bankruptcy may be complex, and it is important to know what to include in the restructuring plan. An attorney may offer insight into the process and could provide guidance if creditors object to the plan.
