For a business that is profitable, but cannot meet cash flow obligations, Chapter 11 is a lifesaver.  Essentially, in a Chapter 11, the business continues to operate while putting all its creditors on hold via the automatic stay.  Management proposes a plan to reorganize the company and pay its debts.  The court has the power to modify or cancel contracts and leases to make the plan work.

Some say Chapter 11 gives businesses an unfair advantage because the business continues to compete with other companies while getting a pass on debt, but the long and short is that Chapter 11 retains assets and saves jobs.

Chapter 11 isn’t only for businesses, but can work well for individuals.  Chapter 11 is more complicated and expensive than a Chapter 7 or 13, but there some creative things can be done in an 11 that aren’t available in the other 2 chapters.

If you think Chapter 11 might hold the answer for you or your business, call Doan Law Firm for a free consultation today.