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Stay open for business by filing Chapter 11 bankruptcy

There are many reasons for a business to struggle, even if it enjoyed years of success. A big box store could take customers away from a small retailer. A tornado could destroy a car dealership. A building contractor might have to shut down because of a divorce.

If an unforeseen problem is severely affecting your bottom line and you are spending sleepless nights wondering how your business will survive, perhaps filing Chapter 11 bankruptcy is the solution.

Battling market conditions

Sometimes you can beat your head against the wall to no purpose if your company is failing due to boom and bust market conditions that you cannot control. If you are in a niche market, your customers could leave you to try the newest technology or latest fad product available elsewhere. A larger company could move into town and steal your customers quickly.

Encountering financing problems

Financing is a primary concern for small businesses, often because they do not enjoy the preferential treatment accorded to larger companies. If a small business runs into issues that require additional capital, a lender may deny the funding, causing the company to founder.

Business issues caused by other factors

Many other factors can cause a business owner to consider bankruptcy:

  •         Fire or flood
  •         Criminal activity, such as theft
  •         Loss of key employees
  •         Poor business location
  •         Personal hardship, such as illness or death

How Chapter 11 works

Filing Chapter 11 bankruptcy generates an automatic stay, and any collection activity you are experiencing must stop. A reorganization plan will separate your creditors into groups and state how you will pay each group over a certain time span. You will also file a disclosure statement, which provides financial details about your business and explains what happened that led you to file bankruptcy. The statement will describe how the business will operate in the future, both during the Chapter 11 process and after. All things considered, the bankruptcy process is probably not as onerous as you anticipated. In fact, filing Chapter 11 may be the best solution for getting your business up and running again and ending those sleepless nights.

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Schwartz Bankruptcy Law Center

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3339 Taylorsville Road
Louisville, KY 40205

Phone: 502-785-8549
Phone: 502-485-9200
Fax: 502-485-9220
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New Albany, Indiana 47150

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