A Chapter 11 bankruptcy business filing can be a good solution for a business owner who wishes to keep their business operational, yet needs a financial solution because they cannot pay their unsecured debts. The key element of Chapter 11 is that it allows a business to remain operational while paying off unsecured debts through a repayment plan. This is significantly different from Chapter 7, which involves liquidation of the business by selling nonexempt assets.

When planning to file a Chapter 11 bankruptcy business petition it is important to make sure that you follow certain guidelines. The first step of the process should involve consulting an attorney. While it may be possible to file a straight bankruptcy without consulting an attorney if you do not own a business, if you do own a business and you plan to develop a repayment plan using Chapter 11 then it is imperative that you receive experienced advice. Doing so could mean the difference between your business being able to survive bankruptcy and the business eventually dissolving.

Second, you must make sure that you are completely upfront and honest with the court regarding your assets as well as your debts. One of the most common mistakes that many people make when filing a Chapter 11 bankruptcy business filing is to try to withhold information regarding certain assets and/or debts. The reason for this is usually because a business owner hopes to avoid having an asset liquidated in order to pay creditors or to keep from losing a credit card. Doing so can have negative consequences that can tremendously effect the outcome of the bankruptcy case.

Third, it is important to make sure that once a repayment plan has been devised that you make your payments on plan. The court will work with you to develop a reasonable repayment plan that will allow you to continue operating your business. This is the entire goal of Chapter 11. If it is determined that you would not have a sufficient amount of disposable income to be able to make repayments to your creditors, then it is possible that you may qualify for Chapter 7 bankruptcy. Keep in mind; however, that while Chapter 7 bankruptcy may dismiss at least some if not all of your unsecured debts it will result in complete liquidation of the business.

The best way to make sure that you emerge from bankruptcy with as much of your business intact as possible is to consult a business bankruptcy attorney as soon as possible. Delaying the inevitable will only make matters worse and could severely limit the options that are available to you. There is no shame in filing for Chapter 11 business bankruptcy. The law has made this option available to business owners to provide them with protection from aggressive creditors as well as to create a venue through with creditors can be repaid. Taking advantage of the opportunity to file for Chapter 11 can help you to regain your financial footing and emerge from bankruptcy with a fresh future.

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