As a business owner, you may find your debt levels becoming unsustainable. You have started looking into your options and decided that you may need to declare bankruptcy. It is unclear if the debt can be addressed in any other manner.
However, you are hesitant to do so because you believe this would mean you have to close your business. It is still making money, even if you can’t pay back the debt that you owe. Is there any way to declare bankruptcy but remain open at the same time? Or are you obligated to close your business?
Reorganization bankruptcy
With something like Chapter 7 bankruptcy, which is liquidation bankruptcy, closing the business may be necessary. If you have to liquidate physical assets and inventory, there may be no way for your business to continue. You simply pay back what you can after the liquidation and have the remaining debts forgiven.
But many business owners will use Chapter 11, which is a reorganization bankruptcy. In essence, you can reorganize your debt and make it more affordable. This way, the business can continue to stay open. The bankruptcy process will likely take into account how much your business is still earning and then set up a payment plan that you have to follow moving forward. But you don’t have to liquidate assets, and you do not have to close the business.
There are many different options for bankruptcy, and it is very important to understand the specifics of how the process will work. It can help to work with an experienced law firm at this time.