Chapter 11 Bankruptcy Benefits

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Chapter 11 bankruptcy allows a business to reorganize its assets in the face of intense cash flow and debt issues. It allows a business to relieve its debts while continuing to remain in operation, turning the business into a “debtor-in-possession”. Chapter 11 bankruptcy is a complex process and can be daunting, especially for a small business owner.

chapter 11 bankruptcy


There are numerous benefits to filing Chapter 11 bankruptcy with an effective bankruptcy lawyer. Ignoring your credit issues can result in creditors filing legal action requiring immediate payment. Additionally, attempting to navigate a Chapter 11 bankruptcy without the assistance of an attorney can make it difficult to realize the full benefits of the bankruptcy available to you.

  • Allowing you to retain all or part of your business assets, unlike Chapter 7, which only allows you to keep certain exempt assets
  • Enabling you to continue operations, remaining in control of your business, its cash flows, and revenues
  • The product of a mutual agreement between your business and its creditors (most often)
  • Creating an “automatic stay”, preventing creditors from taking collection action without your consent, thus helping preserve your bottom line
  • Allowing certain debts to be canceled such as long-term real estate leases, unsecured debt, and certain contracts.