Commercial Bankruptcy FAQ
It is natural to have many questions about bankruptcy if you have never gone through it before. Here are some frequently asked questions that Craig Geno hears from his clients.
What are my options for bankruptcy as a business owner?
Chapter 11 bankruptcy is by far the most popular form of bankruptcy protection for businesses. It allows owners to reorganize and reduce their debt into an affordable repayment plan and restructure their organization, all while remaining in operation and bringing in revenue. Chapter 12 bankruptcy is an option for farmers and fishing businesses. Chapter 7 and Chapter 13 bankruptcy usually are for individuals in need of consumer bankruptcy, but businesses can also file in certain circumstances.
Will business bankruptcy affect my credit?
A Chapter 11 bankruptcy filing will stay on your business’s credit reports for several years. But as the owner, that item on your company’s report will not necessarily affect your personal credit score. It depends on what your personal credit and finances were like before and after filing. Making payments on time, credit counseling and keeping track of all relevant paperwork can help minimize the effect of Chapter 11 on your credit score.
What are the benefits of a Chapter 11 bankruptcy?
Like other forms of bankruptcy, filing for Chapter 11 puts an automatic stay on debt collection efforts. Phone calls, letters and other harassing contacts from creditors and debt collectors will cease while your bankruptcy is going on. Other benefits more specific to Chapter 11 include:
- Instead of liquidating, the debtor business reorganizes, thus allowing it to stay in business during and after bankruptcy
- Gives the debtor time to negotiate with creditors to reduce what is owed and identify invalid creditor claims
- Allows the debtor to renegotiate existing contracts and reorganize its structure to help make itself more profitable
What is the difference between Chapter 11 and Chapter 12 bankruptcy?
Chapter 12 bankruptcy is specifically intended for “family farmers” and “family fishermen” who earn “regular annual income.” Chapter 11 bankruptcy is available to virtually any other type of business, and for companies of all sizes.
Get Honest Answers To The Rest Of Your Questions
For answers to any more questions you have about Chapter 11 bankruptcy, contact the Law Offices of Craig M. Geno, PLLC. Craig is available for evening and weekend appointments, and you can meet in person or speak on the telephone if you prefer by contacting on 601-844-8254. You can also get in touch using email. Serving the Memphis, Tennessee and the state of Mississippi from his office in Ridgeland.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.