Commercial Bankruptcy

Sometimes, even commercial businesses meet fiscally difficult times and may need to consider bankruptcy as an option for resolving their debts. When this happens, there are two options for companies to consider as methods for pulling them out of insolvency. Commercial bankruptcy choices include Chapter 11, or reorganization bankruptcy, and Chapter 7, or liquidation bankruptcy. Both selections have their benefits and limitations, and companies must choose the option that best meets their needs in those specific circumstances.

Chapter 11

Chapter 11 Bankruptcy is available only to commercial businesses as a means of debt resolution. Its counterpart, which is the same option but for consumers, is Chapter 13 bankruptcy. Under this method, businesses are allowed to reorganize their debt repayment plans into one that is easier to handle financially. In general, monthly payments and interest rates are reduced, and the payment period is extended over a longer time frame.

Chapter 7

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is an option that is used by both businesses and consumers. Under this form of debt resolution, the debtor sells its assets in order to make the money necessary to repay the overdue debts. For companies, these sales may include whole sectors or divisions to other commercial entities.

Contact Us

If your business is thinking about filing for bankruptcy, or if you would like to learn more about commercial bankruptcy, contact the Austin bankruptcy lawyers of Slater, Kennon & Pugh Ltd.LLP today at 512-338-1100 to discuss your concerns with a qualified attorney.