Dealing with debt is not easy. Yet, everyday millions of Americans, many of them right here in Texas, have to cope with burdensome financial circumstances. When debt becomes overwhelming, these financial burdens can make it difficult to live one's life. Debt can have a significant impact on businesses, too. It can be extremely challenging for a business to keep running when debt gets to be too much to handle. This is where a Chapter 11 bankruptcy petition may prove beneficial.
This type of bankruptcy filing is generally intended for to benefit businesses by helping them alleviate heavy debt burdens through debt reorganization. While it is most commonly used by businesses, there are some instances where an individual could file for this type of bankruptcy.
The purpose of a Chapter 11 bankruptcy filing is for a debtor to hold creditors off while they work out a plan to address their debts. This typically entails proposing a plan for profitability post-bankruptcy, which encompasses ways to trim the costs and increase revenue or income. If the proposed plan is approved, then the debt that existed before the confirmation date will be discharged and the debtor will have to begin paying back creditors in accordance with the plan.
Debt solutions are available for both individuals and businesses. Therefore, it is important to understand what these options are so appropriate action can be taken. Although it may be difficult to initiate the bankruptcy process, for many this process is what has helped an individual or business regain control of their finances.