Unfortunately, sometimes unexpected circumstances can lead to a lack of liquidity. When this happens, you may find that your business is facing insolvency. Filing for a Chapter 11 bankruptcy can provide your business with a lifeline to stay in operations while you work on making your finances more positive. Here are some tasks you should undergo once you’ve filed for Chapter 11 bankruptcy.
Get An Agreed Upon Repayment Plan With Creditors
When you file for Chapter 11 bankruptcy, you’re alerting creditors to the fact that you’re unable to repay your debts according to your current agreements. You’ll need to work with your creditors to come up with an agreed-upon repayment plan. Under Chapter 11, your debts are not resolved. You still owe your creditors. Each creditor will vote on your new repayment plan. If enough of your creditors approve your proposed repayment plan, it will become approved by the court for action.
Have A Process For Streamlining Operations Reports
Once you file for Chapter 11 bankruptcy and have a confirmed repayment plan with your creditors, you’ll need to supply everyone with operations reports. Since they will be an ongoing necessity as you repay your debt, you’ll want to set up an automated process to streamline these reports. Whether it’s by accounting software or a bankruptcy law financial CPA, you should have a system in place from the start. This way, you don’t run into any last-minute trouble trying to create and deliver operations reports to your creditors.
Inform Employees Of Layoffs
Part of your financial reconstruction plan may be to layoff some of your employees. The WARN act, known formally as the Worker Adjustment and Retraining Notification Act, is something you’ll need to be knowledgeable about. It states that you must inform employees 60 days prior to any mass layoff. The WARN act applies to businesses that have 100 or more employees who are laying off at least 50 employees.
Know What You Need Authorization To Do
Under Chapter 11 bankruptcy, some of your rights as a business owner are eliminated during the repayment period. A court-appointed trustee will be put in charge of making final financial decisions for the business. These include decisions like entering into rental agreements, expanding the business, the sale of assets, and retaining attorneys for future help.
Chapter 11 bankruptcy can assist you in keeping your business in operations while you safely pay back your creditors. While it involves a lot of paperwork and oversight by officials, it’s a surefire way to ensure your business can still remain. If you’re considering filing for Chapter 11 bankruptcy, be sure that you implement the four tasks about to ensure the future financial health of your business.
You must be logged in to post a comment.