Deciding to file for chapter 11 bankruptcy can be a very difficult decision, but one that is sometimes essential. For best results when choosing whether or not to file for chapter 11 bankruptcy, be sure to gain some knowledge about the bankruptcy process. Once you have decided that chapter 11 bankruptcy is the right choice for you, look for a lawyer who is skilled in the area of bankruptcy law. In addition, be sure to collect as much paperwork as possible related to the business. Finally, be prepared to sit down with creditors in order to come up with a possible payment plan as soon as possible.
One of the most important first steps in learning how to file for chapter 11 bankruptcy involves understanding exactly what is being claimed in this form in bankruptcy. Chapter 11 bankruptcies are typically intended for businesses, and in fact allow the individual owner to stay in business. As opposed to chapter 7 bankruptcies, in which the business is liquidated, individuals who file chapter 11 bankruptcy instead are allowed to work out a plan with the court system to systematically make back payments to debtors.
If chapter 11 bankruptcy sounds like a good idea from a business standpoint, the next step should be to find a lawyer who is qualified to deal with this specific type of legal process. Deciding to file for chapter 11 bankruptcy is a very difficult process, and even the most experienced lawyers often have a difficult time working their way through the requirements. Be sure to talk to friends, family members, or colleagues who have also filed for chapter 11 bankruptcy. Chances are, one of the them will be able to provide you with the name of a lawyer who is skilled in this area of law.
Next, spend plenty of time getting as much business-related paperwork together as possible. This includes lists of your assets and items that can be liquidated, typical incomes and expenditures, and other financial information. This typically must be submitted to the court system within 15 days of filing for chapter 11 bankruptcy.
Finally, be prepared to work out a payment plan with the debtors and creditors to whom money is owed. In order to be in compliance with federal laws related to chapter 11 bankruptcy, the owner of a business undergoing this type of bankruptcy must meet with the debtors within one month in order to work out a payment plan that is acceptable to both parties.