Most businesses acquire debt to help them expand or diversify. Although this can help them stay nimble, too much debt can limit options and threaten the corporation’s viability.
If your company needs relief from excess debt, bankruptcy can be an attractive option. Depending on the type you choose, you can restructure your debt while making changes to increase your profitability.
Discuss your situation with our Madison business bankruptcy lawyers today so we can explore bankruptcy options and alternatives. If you choose this option, our formidable bankruptcy attorneys will work with you throughout the process to help you get your business back on its feet.
Any company can run into trouble unexpectedly. Sudden market developments, interest rate changes, supply chain problems, and layoffs at a large area employer can negatively impact your commercial prospects.
Recognizing that it is impossible for a business owner to anticipate and prepare for every eventuality, bankruptcy laws allow them to restructure their debt while continuing to operate and contribute to the economy.
Bankruptcy is a tool that can help you remain operational and return to profitability, and our skilled attorneys in our Madison office can explain the various forms of business bankruptcy available in your specific situation.
All forms of bankruptcy offer protection from creditors. Upon filing the petition, creditors can no longer contact you directly, and bankruptcy prevents legal proceedings to collect debt. The best option for your company depends on how much you owe and whether you intend to continue operations.
A Chapter 11 bankruptcy can be a fair alternative for businesses that are worth more than their assets’ value and can be profitable in the future with changes to operation and debt restructuring. A corporation seeking a Chapter 11 bankruptcy must present a detailed plan of reorganization to its creditors explaining how it will alter its operations to become more profitable.
The plan must explain how it will repay each class of creditors, and creditors in the same class must receive the same offer. Plans of reorganization generally anticipate the company emerging from bankruptcy within five years, but the time frame will depend on how quickly it can reasonably repay the debt while remaining viable.
Creditors can object and submit a plan of reorganization that they prefer. A court will not confirm it until at least half the creditors in each class, representing two-thirds of the debt, approve it. A Madison business bankruptcy attorney can provide more information on a Chapter 11 bankruptcy and whether it is suitable for your situation.
Companies with less than $7,500,000 in debt can take advantage of a Chapter V bankruptcy. This process allows a business to continue operations while it restructures, but it is quicker and often more cost-efficient than a Chapter 11 bankruptcy.
A company must file a plan of reorganization describing how it will streamline operations and pay its creditors. In contrast to a Chapter 11, the creditors cannot refuse or propose their own plan. Our lawyers in Madison can help to develop a strategy that allows your business to emerge from a Subchapter V bankruptcy, free of debt and well-positioned for future profitability.
Markets and tastes change rapidly, and sometimes, external conditions render a company obsolete. If you want to close your corporation, you can file for a Chapter 7 business bankruptcy protection. Even in this scenario, most people can retain their assets with the help of an attorney, and the overall process involves a trustee assuming control of the business, liquidating its assets, and paying creditors.
Excess debt can impede your business and cause significant stress. Bankruptcy offers an alternative that can, in many cases, preserve your company.
Our Madison business bankruptcy lawyers will explore all options and make a recommendation, but the choice is yours. To get started, schedule a free case evaluation today with a member of our team at Gillman Capone.
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