Bankruptcy is an ever present specter for businesses large and small, and though it can happen unexpectedly or over a long, drawn out process where the business just can’t manage its debts, it’s not the end of the world. A business has the option to file for Chapter 11 reorganization bankruptcy.
Naturally, if it’s your business that you have started and grown from small through medium to large, it can be quite a blow when you find that there are problems with the business’ finances. When you reach the stage where you have financial difficulties that you can’t sort out yourself, then you need to look at options for moving forward as soon as you can.
As a business, therefore, you have the option to file for Chapter 11 bankruptcy, but you need to know what is involved and the implications of doing so. You can also file for Chapter 11 as an individual sole trader or as a partnership if the circumstances permit.
An Overview of Chapter 11 Reorganization
How to Start
A Chapter 11 bankruptcy case starts when a petition is filed in the bankruptcy court and is usually voluntary. As the debtor, you will generally take the initiative for the filing.
Though a group of your creditors can get together and file what is known as an involuntary Chapter 11 petition. This would be against a defaulting debtor.