Bankruptcy under Chapter 11 of the Bankruptcy Code is designed to give businesses a fresh financial start. However, despite the regularity with which companies file for bankruptcy, confusion still surrounds this legal process. Read below to learn more about what filing for bankruptcy may look like for your business and how a bankruptcy attorney can help your business survive. For businesses based in Texas, you can rely on Dallas commercial business attorney, David Ritter, to develop a bankruptcy plan that meets your business’s needs.
What Does the Bankruptcy Process Look Like?
Filing for bankruptcy looks different for each business depending on their unique financial situation and specific business operations. Generally, a commercial bankruptcy attorney will help your business file for the most effective chapter of bankruptcy to help your company retain as many assets as possible. In most cases, filing for bankruptcy triggers an “automatic stay,” which stops all collection and recovery activity against the debtor. Ideally, this protection gives the debtor time to work with a bankruptcy attorney and make a plan to repay creditors in a reasonable amount of time, while retaining important assets.
When businesses hire a bankruptcy attorney at the first sign of financial trouble, restructuring or reorganization may avoid a bankruptcy filing completely. For best results, a business should contact a commercial bankruptcy attorney at least six months before it expects to have serious financial problems to develop a strategy for the business to reorganize and repay creditors. For companies where reorganization or restructuring outside of bankruptcy may not be an option, filing for chapter 11 bankruptcy will usually offer some appealing benefits. Under chapter 11, companies can retain assets, operations, and employees, and eventually obtain a discharge and “fresh start” to resume regular business practices. Businesses located in Texas need to contact David Ritter, commercial business attorney, to develop a plan to overcome bankruptcy and start fresh.
Can I Keep My Business if I Declare Bankruptcy?
Depending on a business’s unique financial situation, filing for bankruptcy does not necessarily mean that the business owners will lose the company. Businesses that file for bankruptcy under chapter 11 are often able to continue normal business operations and retain employees and assets until creditors and debtors can reach and implement a compromise that allows the owners to continue running the business. If businesses hire a bankruptcy lawyer at the first indication of weakness, there is increased opportunity for restructuring and reorganization that is agreed to by all stakeholders, which may help a business avoid filing for bankruptcy at all, or by making it easier to come out of a bankruptcy case with the business intact.
How Could Filing for Chapter 11 Bankruptcy Help My Business?
Filing for bankruptcy is not an easy choice, but the Bankruptcy Code provides a way for businesses to make a fresh start. If a business cannot pay its creditors back under any scenario, it may consider chapter 7, which results in a liquidation. Businesses initiate filings under chapter 11 because it allows owners creativity and flexibility in how they pay back creditors and exit bankruptcy with a discharge of their debts. Although chapter 11 filings require added costs, this chapter permits businesses to retain assets and operations as a “debtor-in-possession,” and a skilled commercial bankruptcy attorney may be able to help a business maintain cash to pay employees and continue general operations. No bankruptcy case is the same, which is why companies should seek out a commercial bankruptcy lawyer to guide them through this complicated legal process and produce the best possible outcome.
David Ritter has over 25 years of legal experience in commercial bankruptcy and litigation, and he can help your business overcome financial challenges and obtain a fresh start. Whether working with businesses to file for bankruptcy, restructure, reorganize, or mediate with creditors, David Ritter is a creative problem solver who is dedicated to achieving favorable outcomes for his clients. Businesses searching for a Dallas commercial bankruptcy attorney need to contact David Ritter at Ritter Spencer PLLC.