Individuals with debts in excess of the Chapter 13 limits or businesses can file for Chapter 11 bankruptcy. Like Chapter 13, you must propose a payment plan to the court. Which debts you will pay entirely, which ones you only pay a percentage of, and when you pay them is determined by the court and your specific situation.

It is a good idea to consider Chapter 11 bankruptcy if:

• Your unsecured debts exceed $250,000 and your secured debts exceed $750,000.
• Under the current terms, you will not be able to meet your payment obligations for current debts.
• This is progressing to the point that creditors are threatening to take legal action against your company.

The assumption regarding Chapter 11 is that a current business is worth more if it continues to run than if it were completely liquidated. After filing and successfully completing Chapter 11, the business may continue to operate with reorganized debts, and therefore be more efficient than before, repaying debts using any business profits, selling a few assets, and even mergers. This process is also beneficial because it can prevent the need to lay off employees.

It seems like this is a win-win situation, but each situation requires careful analysis by a qualified attorney who is willing to take the time to help you. Contact our office for a free case evaluation and assessment of your options.