When it comes to bankruptcy, most people are familiar with Chapter 7 and Chapter 13. While these are the most common choices for individuals, Chapter 11 bankruptcy often comes into play when a business needs to reorganize due to a large amount of debt. It is not common, but there are times when an individual can file for Chapter 11 bankruptcy.
With this type of bankruptcy, the debtor is in position to propose a plan to the court that shows a path to profitability after the process is complete. This can include things such as finding new revenue sources and cutting back on expenses.
Business owners who are interested in Chapter 11 bankruptcy need to become familiar with what is required of them. This includes the necessity to provide the court with the following:
— Statement of operations.
— Copy of your most recent balance sheet.
— Copy of your most recent federal tax return.
— Cash flow statement.
You don’t want to go into Chapter 11 bankruptcy thinking that the process is simple. The court will require a lot of information, and you need to provide it without delay. This is the best way to ensure that everything moves forward as quickly and efficiently as possible.
As a business owner, you never want to find yourself searching for more information on Chapter 11 bankruptcy. If this does happen, it likely means you are in debt and seeking a way out. It may not be the ideal situation, but this type of bankruptcy could be just what you need.
Source: FindLaw, “Chapter 11 Bankruptcy,” accessed Sep. 23, 2015