Owning a business is an ambitious dream for many people. However, sometimes you make mistakes in the business planning process and end up with financial situations that are beyond your capacity. One of the best ways to avoid falling apart under the weight of your business's financial obligations is by filing a chapter eleven bankruptcy petition. The main reason why business owners opt for this bankruptcy is that it allows them to continue operating their business and improves their overall financial health. Here are some other benefits you should expect from filing chapter eleven.
Your Creditors Get a Stay
Owing people while operating a business is one of the most stressful situations to manage. Some are aggressive and can even send debt collectors to your business premises. All these issues will complicate your business development and even lead to the loss of clients. When you file chapter eleven, the court gives an automatic stay for all creditors. It becomes illegal for the people you owe to harass you about the repayment. The lawyer creates a repayment plan and becomes the point of contact between you and them.
You Get Emergency Relief for Operations
Chapter eleven gets more urgency than the other chapters. Immediately after you file your petition, the court will get together and listen to emergency motions about your case. Your lawyer might request permission to undertake some actions that will keep the business operational. The court will determine how you can access money for basic needs like paying the rent, employee salaries, and maintenance. The emergency relief that you get will keep your business open as you continue with the process of repaying what you owe.
You Sell Property Without Liens
It is challenging to sell a property with a lien. However, filing chapter eleven makes it possible. The court will permit you to sell the property without the encumbrances and liens that are part of the other types of bankruptcy petitions. Buyers often avoid buying property with liens because it is more of a financial risk, and they could end up facing legal issues. Filing chapter eleven bankruptcy will help you avoid having liens placed on your business property, which will keep your options open.
The best way to handle chapter eleven is by speaking to a competent lawyer. They will assess your business situation and needs to determine the ideal bankruptcy process to follow. This will give you peace of mind and speed up the process.
Contact a law firm like McManus & Associates to learn more.