Declaring bankruptcy is generally thought of as saying you cannnot pay your debts anymore, selling off what assets you do have, and starting over. For chapter 7 bankruptcies filed by both corporation and individuals, this is true. Except corporations don’t get to start over after chapter 7 bankruptcy.
Many times corporations that “go bankrupt” continue operating, and some of them even become profitable again. How? They received legal guidance from an experienced corporate bankruptcy attorney and filed for chapter 11.
Chapter 11 bankruptcy allows for reorganization of the debtor’s assets. Usually medium or large businesses that want to maintain control of assets file chapter 11. The debtor negotiates a payment plan and they are forgiven for all the debts they had before bankruptcy, assuming the payment plan is approved.
Corporations and businesses usually file chapter 11 bankruptcy because this kind of case allows them to restructure their finances and pay down debts without stopping operations. This allows the debtor to remain in control of the business operations instead of selling assets off to creditors.
Chapter 11 essentially allows businesses a fresh start, provided they meet their financial obligations to pay down creditors. Chapter 11 gives business’s government protection for long enough to reorganize and restructure payment plans. For corporations and businesses that have brand awareness this chapter is particularly useful because it allows said business to avoid declaring complete bankruptcy. They remain in operation so long as they adhere to the repayment program.
Corporate Bankruptcy Attorney
For corporations considering bankruptcy in Illinois, the best thing to do is to seek legal counsel from an attorney who is experienced in corporate filings. They will be able to assess your business’s financial situation and tell you case-specific challenges that you will likely overlook.
An attorney is vital to obtaining the best possible outcome for any bankruptcy case. The Burns Law Firm P.C. provides legal services for chapter 11 corporate bankruptcy cases. We will fight for the best possible outcome for your case so you can stay in business.
Visit us on the web to learn more about our practice areas or call us today at (847) 782-1300!