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How do I know if Chapter 11 is right for me?

Your business has been struggling, and you now have debt that seems insurmountable. You have considered filing Chapter 11 bankruptcy, but you do not know if it is the right choice for you. Bankruptcy is a very useful tool for individuals and businesses that wish to discharge their debts and start over with a clean slate. If you are wondering whether to file Chapter 11, these are a few ways to determine whether this option is right for you.

You own a business, or you have a certain amount of debt

Any type of business can file Chapter 11, from sole proprietorships to national corporations. If you own a business that has accumulated significant debt and you do decide to file bankruptcy, Chapter 11 will probably be the correct chapter. However, if you have over $394,725 in unsecured debt of $1,184,200 in secured debt, you may also file Chapter 11.

You want to continue operations

Under Chapter 11, you will be allowed to continue your business’s operations. You will keep running your business as you repay your creditors according to your repayment plan. This is a major encouragement for business owners: In addition to wiping away many of your debts, your business can still survive.

You need to keep some assets

Chapter 7 is sometimes referred to as liquidation bankruptcy, because debtors must return or sell many piece of property to repay their debts. However, Chapter 11 allows you to retain many assets and property required for business. If you run a business, this aspect of Chapter 11 is crucial.

Whether your business is struggling or you have mountains of debt, you do not have to go through bankruptcy alone. Many debtors consult a bankruptcy lawyer to help guide them through this difficult process. Fortunately, after filing Chapter 11, you and your business can have a fresh start.

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