Chapter 11 Is A Debt Relief Option For Businesses

Chapter 11 is a type of bankruptcy that allows businesses to keep their doors open, reorganize and repay the debt over time. While it is most commonly used by businesses, particularly corporations, it may be used by individuals in some circumstances.

How Does Chapter 11 Work?

Immediately, an automatic stay takes hold when Chapter 11 is filed. This alone provides critical breathing room for businesses, as it brings a halt to creditor actions of all kinds, including lawsuit threats and attempts at repossession or foreclosure.

Chapter 11 reorganization plans can be individualized and extremely complex form of bankruptcy. Depending on the situation, they may last a matter of months, but are much more likely to continue for years. Within a Chapter 11, a business may be able to obtain new loans or financing. The debtor may have the power to strategically reject or cancel contracts. A business can completely be restructured.

At Tsao-Wu & Yee LLP, our Bay Area attorneys are experienced in this uniquely complex form of bankruptcy. We have a reputation for creating Chapter 11 plans that get confirmed by the bankruptcy court and prove effective in achieving the business's goals.

It is worth noting that Chapter 11 is not the only business debt relief option. Businesses may file Chapter 7 if the business is to cease operations. Furthermore, sole proprietorships may be able to use a Chapter 13 to overcome personal and business debt.

Learn More About Business Bankruptcy

Call 800-494-0390 or email us to discuss your case with an experienced lawyer. We have law offices in San Jose and San Francisco, California.