In Texas, every debtor should make sure that they are well versed on the existing body of bankruptcy laws before filing for Chapter 11 bankruptcy. There is nothing as risky as making uninformed decisions when it comes to something as critical as bankruptcy.
The owner of a business may choose to file under Chapter 11 if his or her business has been consistently failing to generate profits and believes that a reorganization of the business may help. However, any business owner must be aware that Chapter 11 has advantages as well as a few disadvantages. For instance, under Chapter 11 certain kinds of debts are non-dischargeable.
The owner of a business should first find out whether or not such reorganization fits their particular situation. Besides studying the existing laws, an owner should consult an experienced attorney who specializes in the field of bankruptcy. This kind of consultation will not only provide the business owner with a clear picture with respect to the options before him or her, but also help find out whether or not Chapter 11 is the best solution to the issue at hand.
When deciding if Chapter 11 is the best solution, or if there are other better options such as an out-of-court settlement, it is wise to think about a few crucial points. An attorney in the field may provide a business owner with sound advice, thereby decreasing his or her risks while going through the process of debt relief. For more information, see our Chapter 11 web page.