CHAPTER 11 BANKRUPTCY
Chapter 11 bankruptcy is available to every business in the United States. It is also available to individuals, but it is most commonly filed by corporations, partnerships, and other business entities. You may have read about or seen Chapter 11 news reports, particularly around 2008 when the economy took a hit.
Statistics About Chapter 11 Bankruptcy
Chapter 11 bankruptcy is different from Chapter 7 and Chapter 13 mainly due to the fact that it is meant to relocate assets in order to manage debt repayment. It is also known as corporate reorganization and is, by far, requested by businesses more often than by individuals. Laws.com released the following statistics about Chapter 11 bankruptcy:
There were more than 14,000 filings for Chapter 11 bankruptcy in 2009.
The total number of Chapter 11 filings in 2007 was less than 6,000. After the recession of 2008 hit, 2009 saw an increase to 14,000 filings.
The majority of Chapter 11 bankruptcy cases during this time period were filed by businesses in the financial services, telecommunications, energy/utilities, and automotive/transportation industries.
While these numbers are staggering, there is silver lining among the statistics. It’s true that many more businesses filed for bankruptcy and that the entire nation saw a spike. But remember that, had it not been for their ability to file for bankruptcy, those businesses may not have survived the recession. Chapter 11 bankruptcy allows businesses that are financially struggling to continue running during and after bankruptcy.
If you’re a small business owner on the brink of bankruptcy, you’re not alone. Even some of the nation’s largest corporations have filed for bankruptcy and helped their business because of it. Bankruptcy provides a viable option for keeping your business afloat, especially during the early years where net profit seems unattainable.
One worry that you may have regarding Chapter 11 bankruptcy is that the process will be too expensive and time-consuming to be worth it for your business. Chapter 11 provides special provisions specifically for small businesses that can help speed up the process and reduce fees associated with the case. Some of those include:
No creditors’ committee
No disclosure statements
Longer periods to propose a plan
Additional reporting duties
Additional trustee oversight
Small businesses can work with the bankruptcy court to order one or many of the special provisions listed above. These can drastically reduce the amount of time you’d have to spend preparing for the case and, consequently, help your business save money throughout the process.
If your business is struggling and you’re curious about what Chapter 11 bankruptcy can do for you, let our team of experienced attorneys guide you. Avoiding bankruptcy can, in certain situations, lead to a downfall of your business that could have been prevented with the right legal guidance. Let our team evaluate your business needs and provide expert advice to help you make an informed decision.
CHAPTER 11 BANKRUPTCY ATTORNEYS IN PIEDMONT TRIAD
Bolton Law Group, P.A. serves individuals and businesses seeking bankruptcy advice and debt relief. With an office in Greensboro, North Carolina, the board certified attorneys of Bolton Law Group have assisted more than 15,000 individuals and businesses in the Piedmont Triad area. Attorneys Phil Bolton and Diana Santos-Johnson will consult with you about your options, provide expert guidance for financial recovery, and give you long-term advice that’s built on strong financial principles. Contact our team today to learn how you can get the financial restart you need.