3 Misconceptions About The Chapter 11 Bankruptcy Process For Businesses
No one is ever planning to end up in significant debt. However, both individuals and businesses can find themselves in the unfortunate position of being weighed down by expenses owed. Substantial debt can occur for a variety of reasons, many of which are perfectly understandable and could happen to any of us. The results of one study indicated that 8 out of 10 American workers reportedly live paycheck to paycheck. In this context which many people throughout the country are living in, just one sudden medical bill or large unexpected expense can interrupt financial plans and stability. And despite the fact that direct payments from the $1.9-trillion American Rescue Plan were released in March of this year, approximately 1 in 6 Americans reportedly lack any emergency savings.
Filing for bankruptcy may not be a perfectly ideal solution but that doesn’t change the fact that it can be a valuable step to take in restoring financial stability for both individuals and businesses. Chapter 11 bankruptcy is one such pathway toward financial restoration. However, that doesn’t mean that understanding the ins and outs of this concept is simple, especially when it comes to businesses that want to protect their assets.
Misconceptions About the Chapter 11 Bankruptcy Process for Businesses
Bankruptcy Means Going Out of Business
Nothing could be further from the truth. Instead of requiring a liquidation of assets, filing for a Chapter 11 bankruptcy essentially allows for a business to restructure their debts so they can remain in operation. Many companies not only survive the Chapter 11 process but are also able to go on and become more financially stable than ever before.
You Will Lose Your Customer Base
Bankruptcy has long carried a stigma and many businesses fear the potential repercussions of publicly declaring insolvency. However, in reality, many customers will likely remain unaware of a Chapter 11 filing unless they regularly follow news outlets that publish the financial updates of businesses. Equally important, remember that most businesses operate almost as usual in the public eye during this process which means consumers are more likely to focus on whether the business is continuing to meet their needs than its financial constraints.
This is a Permanent Constraint
Bankruptcy can be a tedious and stressful process and carries implications in addition to its benefits. However, one of the things that can help businesses move forward throughout this process is the knowledge that the stressful aspects of bankruptcy are only temporary. No matter how serious things may currently seem, persevering under the guidance of a knowledgeable attorney can help ensure the business remains financially stable post-bankruptcy for years and years to come.
We Can Help You Make an Informed Decision
There are many misconceptions about filing for bankruptcy and a Chapter 11 filing in particular. It is imperative that you reach out to an experienced legal team as soon as you realize you have become burdened by excessive debt in order to ensure you fully understand your options and which route is best for you. As the Plantation bankruptcy attorneys at Nowack & Olson, PLLC, we are dedicated to ensuring our clients have the information they need in order to make the best decisions for themselves and their families. Our four decades of combined experience and commitment to the financial recovery of our clients has helped us reach stunning legal outcomes over and over again. Contact us today to begin discussing your next steps.