Chapter 11 Bankruptcy

Sometimes corporations find themselves in financial turmoil as a result of over-expenditure and not enough profit to cover these costs. When this happens, businesses may need to turn to Chapter 11 bankruptcy, also known as corporate bankruptcy, to resolve this financial misfortune.

On average, the number of corporate bankruptcy filings fall between 30,000 and 40,000 companies each year. You should not feel ashamed if you need to turn to this resolution to pull your business out of overwhelming debt; these numbers indicate that corporate bankruptcy is not unusual.

What is reorganization?

Chapter 11 bankruptcy is a form of reorganization bankruptcy, specifically targeted at businesses. Under this particular form of debt resolution, the company remains in control of operations and restructures its debt payment plan into a more economically feasible arrangement. Either debtors or creditors may call for and propose plans under Chapter 11.

While the company does remain in control of its operations, the bankruptcy court oversees all transactions that take place after the bankruptcy filing. In order to increase the feasibility of the proposed repayment plan, debtors are granted, along with the privilege of continued operations, automatic stay (the prevention of creditors from continuing to probe the company with debt collection attempts).

Contact Us

If your business is experiencing a period of economic distress and you feel as though filing for bankruptcy may be the best solution, please contact the Austin bankruptcy lawyers of Slater, Kennon & Pugh Ltd.LLP today at 512-338-1100. Our qualified attorney can help get you and your company on the right track to debt resolution.