Bankruptcy is a hard prospect for any person or business to consider. It’s not easy to look at the process as a way to start over because it often feels like failure. But a new start is exactly what the process is supposed to be, especially when businesses want to stay on track as they face their debts.
Chapter 7 is perhaps the most common type of bankruptcy for individuals unable to handle their debts with any other methods. Often called liquidation, a bankruptcy under Chapter 7 often appoints a trustee to sell off available assets and make deals with creditors to forgive any debt that the profits of these sales cannot cover. But businesses often cannot leave their assets behind.
Chapter 11, often known as a reorganization, allows petitioners to keep operating their business as they work with creditors to restructure debt and pay it off over time. A pharmaceutical company located in New Haven until recently had their Chapter 11 petition approved last month.
This move allows the business to downsize its operations, which included a move for its headquarters to New Jersey. The chief executive officer (CEO) of the firm expects to be able to move out of bankruptcy protection within three months.
Business owners looking to keep working through bankruptcy can often look into Chapter 11 as an option, and a lawyer may be the most helpful friend during this process. An attorney can help with the initial filing and review the details to see if a bankruptcy court is likely to approve a petition while businesses grow.