It is never the best sign for a business to consider declaring bankruptcy, but it is not always a vital blow to a company or its brand. Certain types of bankruptcy allow some organizations to continue operations while they work out their abilities to settle debts in the near future.
- What are the types of bankruptcy that can continue a business into the future?
Chapter 7 bankruptcies, often called liquidations, usually involve all available assets in an attempt to settle as many debts as possible. This is not an ideal choice for businesses that wish to retain control of their futures. Chapter 11 bankruptcies, referred to as reorganizations, often put companies on payment plans to resolve a certain amount or number of debts at once.
- What should managers expect during a Chapter 11 bankruptcy?
The filing process, successful or not, can be a cash-hungry process, so liquid assets should be preserved as long as possible. Priorities for the essential functions of a company or office should be cataloged and ordered, because some processes or resources may have to go for at least a temporary phase.
- How can companies prepare to recover from Chapter 11 bankruptcy?
It is important to have a communication plan for stakeholders and customers. People who are interested in a company's products or services will remain so through hard times if they know what to expect and for how long. These times are not easy, but they can result in stronger organizations. An attorney may also be useful for individuals and companies who feel the need to resolve debts through bankruptcy.