Getting a Houston bankruptcy lawyer to file bankruptcy under chapter 11 is not difficult. Getting a very good Houston bankruptcy lawyer to help your business file for bankruptcy under chapter 11 can be a herculean task. It is principally used by businesses to protect themselves from having their properties liquidated. It is laws that have helped many a business recover from a potentially ruinous situation to a position of strength. The 2011-12 property bubble affected very many businesses and this gave rise to a lot of filings under chapter 11. A law that was not very popular before 2011 suddenly became very popular, with many Houston bankruptcy lawyers attending refresher courses to handle the sudden influx of bankruptcies.
It helps businesses stop threats that affect them as going concerns
A business as a going concern is under threat if it cannot keep its premises. Foreclosures have for some time threatened the survival of many businesses. It has kept many senior executives and their Houston bankruptcy lawyers awake at night. Chapter 11 is a Godsend in such circumstances. It helps a business and its creditors renegotiate the payment schedule that suits the financial capabilities of the business. You cannot tie a business’ working capital to repayment of debt. You also cannot sell a business’ fixed assets to help resettle a debt unless you want to make it go under. Chapter 11 Bankruptcy has helped many businesses survive turbulent economics and keep their members of staff in employment.
Also known as reorganization bankruptcy, chapter 11 allows the business to operate under a bankruptcy court. After the business restructures itself according to the court provisions, the court may give partial relief from debts, leases and contracts’ commitments with their customers and suppliers. As a last resort for small businesses, Chapter 11 gives 12 months in which business owners need to reorganize their business operations without the pressures associated with creditors asking for their money. 12 months is a lot of time for a business that seeks to remain in the market.
A lot can Change in 12 months
Maybe the business is facing the difficulties of honoring their obligations with the creditors due to a sudden slump in their market. In 12 months, the market may take an upward swing giving the business a lot of liquidity with which to resettle the debt. If this business was shut down due to inability to repay, then people would have lost jobs, the creditors will not have been paid and the IRS would have lost years of tax money owed. Might be that a business is unable to meet its obligations because it also has debtors who are yet to honor their obligations. Should the debtor honor the debt in the interim period, the business’ future suddenly looks bright. A famous Swahili saying says ‘hurry hurry has no blessing’. Forcing a business to close as a going concern is not beneficial to anybody. Rather, a chance afforded to a business to redeem itself through the help of Houston bankruptcy lawyer and Chapter 11 bankruptcy law comes in handy.
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