Filing Chapter 11 Bankruptcy in Wellington, FL Can Save a Viable but Struggling Business

Corporations are mostly considered persons under the law, although there are plenty of well-established limits and boundaries on that generally useful legal status. As such, corporations are entitled to seek and obtain bankruptcy protection when their financial situations deteriorate to the point that keeping up with payments owed to creditors becomes impossible.

As with natural persons, corporations can file for bankruptcy under Chapter 7, whereby all of the petitioner’s assets will normally be liquidated and the proceeds distributed to creditors. Filing Chapter 11 Bankruptcy in Wellington FL often proves to be a much less drastic and more productive option in cases where this terminal sort of resolution is not required.

A Court-Ordered Chance to Get Back on Track

Many people who consider filing for Chapter 7 bankruptcy end up being advised that another option would be more suitable to their situations. In most cases, that means filing for a so-called “wage earner’s bankruptcy” under Chapter 13, a type of court-supervised financial reorganization designed specifically for individuals and small-business owners.

Filing Chapter 11 Bankruptcy in Wellington FL provides the same general type of relief for corporations, although individuals with especially complex financial situations can seek the same type of protection. Under Chapter 11, a court appointed administrator will use the statutory tools provided to reshape a company’s obligations such that repaying debts becomes more feasible.

As with Chapter 13 bankruptcies that are arranged on behalf of individuals, a Chapter 11 reorganization will normally require sacrifices from both the creditors involved and the entity seeking relief. In most cases, a fairly rigid timetable for repayment of debts will also be established so as to ensure that definite progress can be both made and measured.

Saving a Troubled Company From Liquidation

Browse our website and it will become clear that Chapter 11 frequently makes excellent sense for businesses that have run into difficulties which can be overcome if given a bit of breathing room. Opting for Chapter 11 instead of liquidation and dissolution under Chapter 7 will mean giving a company a chance to get back on track and return to form. Many companies that go through Chapter 11 reorganizations end up becoming very successful thereafter.

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