As an Oregon business owner, you may have been watching for the last few years as giants toppled. Seeing other businesses fail may strike fear into your own heart, especially if you have been struggling with your company’s finances. Taking on more debt to keep your business going may have been a temporary fix, but now you are dealing with creditors who are impatient for what you owe them.
If you are struggling with these obligations, you may be looking for a solution that will allow you to deal with your debt effectively with the best chances of moving forward successfully. One path that other businesses have taken when they face overwhelming debt is to file for Chapter 11 bankruptcy. Before taking this step, you will want to obtain as much information as possible about how to qualify and what to expect from the process.
Getting started toward debt relief
Chapter 11 is not limited to big businesses and national corporations. Even if you are a sole proprietor, you may be eligible for the protection of Chapter 11. You may qualify if your debt exceeds the maximum allowed for Chapter 13, which may fluctuate as laws change. After filing for Chapter 11, you become a debtor-in-possession, which means you retain ownership of your property as its trustee. This means you can continue running your business, accepting contracts and even obtaining loans, if the court approves.
When you apply for Chapter 11 protection, you will submit a disclosure statement, which provides the court with information about your business, its operations and financial details. The court will use this information to decide if it is possible for you to reorganize your debt. If the court approves your disclosure statement, your next step is to propose a plan for repaying your creditors. This involves prioritizing the classes of debt you owe. The court and your creditors must approve of the plan.
Putting the plan in motion
If your application and proposal gain approval, the court will appoint a third party to execute your repayment plan. This may include selling some of your assets and restructuring the way you operate for maximum profit. After several years of following your plan, the court may discharge any remaining debt.
Because you are likely dealing with some sophisticated creditors, you may find the process of seeking Chapter 11 debt relief to be overwhelming. However, you can enlist the services of an experienced attorney who can guide you through the process, and this may improve your chances of successfully beginning your journey to solvency.