Phone Call Us 414-326-9231
Toll Free 866-678-9352
Text Us 414-277-7742

Is Chapter 11 bankruptcy right for your small business?

Although it is commonly used for larger corporations, Chapter 11 bankruptcy can be a useful tool for small business owners in the right circumstances. Through Chapter 11, you are given a temporary reprieve from all collections actions while you reorganize your business structure and seek out new revenue sources. 

It is important to also note that Chapter 11 is one of the most complex, time-consuming and costly forms of bankruptcy. Depending on your plans for your business entity, it may not be viable or appropriate, particularly if you do not intend to continue with operations. Before filing, take some time to fully understand your options and evaluate what is the best fit for your business.

Chapter 11 involves renegotiating terms of current debts with creditors over a 180-day period (versus 15 days for Chapter 7). When you file, you will have to submit balance sheets, statement of operations, cash-flow statements and a copy of the most recent Federal tax return for your business. Each case is also assigned a U.S. trustee, who oversees your debt reorganization. 

Small businesses make up the majority of Chapter 11 bankruptcy filings, but that doesn't reflect how many actually complete the reorganization process. Even after you file and begin reorganization, the bankruptcy courts may determine that your business is not profitable enough and transition it into a Chapter 7 liquidation plan. In Chapter 7, your business will have to close its doors to pay back your creditors.

Whether you decide Chapter 11 or Chapter 7 is the best option for handling your business debt, the process can be complex. It may be in your best interests to seek advice and representation from an experienced bankruptcy lawyer.

Source: FindLaw, Chapter 11 Bankruptcy, last accessed April 9, 2015

No Comments

Leave a comment
Comment Information

Contact Our Milwaukee Law Firm

Reach Miller & Miller Law, LLC, online or call us at 414-326-9231 to schedule a free initial consultation. Our law office also provides Spanish language services. Se habla español.

To schedule an initial consultation, call 414-326-9231 or contact Miller & Miller today.

Free Case Evaluation

* indicates required field

Milwaukee Office
633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Law Office Map

Kenosha Office
6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Law Office Map

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Law Office Map

Madison Office
2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Law Office Map

Glendale Office
6001 N. Green Bay Avenue
Glendale, WI 53209

Phone: 414-973-8662
Glendale Law Office Map