How Chapter 11 Bankruptcy Helps Small Businesses Owners During COVID

CLIFTON, NJ., Sept. 4, 2020 /PRNewswire/ --  Businesses are being hit with unprecedented challenges due to the COVID-19 pandemic. Brands who were doing well at the beginning of the year never could have imagined the restrictions that would come this year because of the pandemic. According to the attorneys at Silverman & Roedel, if you are struggling, a less-known option may be available: Chapter 11 Bankruptcy.

What Is Chapter 11?

Chapter 11 bankruptcy is a process that leads to the reorganization of the business, allowing it to stay open and pay debts over a longer period of time. This type of bankruptcy gives the business the opportunity to essentially start over while reorganizing its prior debt. Previously, Chapter 11 bankruptcy has been considered one of the most complex types of bankruptcy, so some might be hesitant to pursue it.

However, it may be an option for those businesses that are having a hard time staying afloat in today's difficult economic times.

Benefits of Filing for Chapter 11 During the Pandemic

There are a few benefits to filing for a Chapter 11 bankruptcy during the pandemic, which include:

• Businesses can continue to stay open during bankruptcy
• Businesses have longer to pay debts
• Chapter 11 tends to be faster than other types of bankruptcy
• Owners can stay in control of their business throughout bankruptcy

Filing for Chapter 11 bankruptcy can put a hold on debtor payments and allow the business owner to focus on reorganizing. It can also help business owners get through until they can reopen as normal.

Do You Qualify For a Chapter 11 Bankruptcy

More small businesses can now qualify for Chapter 11 under the CARES Act. Many changes, such as an increase in debt limits, have made Chapter 11 a possibility for businesses who might have not otherwise qualified for it.

What to Expect During Chapter 11 Filing

You can expect a few things once you file for Chapter 11. This includes:

Initial meeting with lawyer: During your initial consultation, your lawyer will evaluate your current debt obligations and income statements.

• File your bankruptcy documents: If you are eligible, your lawyer will file all required documents, including balance sheets, statements of operations, cash-flow, and income tax.
• Attend bankruptcy meetings: You and your lawyer may be required to attend numerous bankruptcy meetings.
• Continue to file reports: You will need to continue filing updated reports and financial documents to support your case.

It is also important to note that you must be open to inspections, as the debtors will have access to financial documents, throughout the bankruptcy process.

About Silverman & Roedel, LLC

Located in Clifton, NJ, Silverman & Roedel, LLC has represented clients in the fields of personal injury, automobile accidents, medical malpractice, social security disability, bankruptcy, and beyond. With over 37 years legal experience, they are dedicated and committed to their clients and seek to achieve the best possible result in each and every case.

Silverman & Roedel, LLC Contact
Pamela Roedel
(973) 772-6411 

SOURCE Silverman & Roedel, LLC