Boston Bankruptcy Attorneys

Benefits of Chapter 11 Bankruptcy

Chapter 11 bankruptcy is the part of the United States Bankruptcy code that is referred to as “business reorganization” bankruptcy. It is aimed specifically at relieving the debts of businesses and corporations. Businesses that file under Chapter 11 are usually able to continue their operations almost normally as debtors-in-possession.

Chapter 11 governs business reorganization. Chapter 11 is designed to permit the restructuring, rehabilitation, and reorganization of the debtor business.

One of the biggest benefits of filing for Chapter 11 bankruptcy is that the company is allowed to keep all or part of its assets, unlike Chapter 7. Chapter 7 bankruptcy permits a debtor to retain only a limited amount of “exempt” property. In the majority of cases, a debtor’s plan will be the result of a consensual arrangement between the debtor, the creditors, and the equity security holders. Chapter 11 does have provisions that allow a debtor to impose a Chapter 11 plan on dissenting claimants in certain situations.

Another benefit is that Chapter 11 allows for certain debts to be completely cancelled or reduced. The debtor can also choose to terminate certain contracts and even a lease. Typical debts and contracts cancelled under Chapter 11 include unsecured loans, union contracts (when the cancellation is financially favorable to the company), supply contracts, operating contracts, and long-term real estate leases.

Contact a Boston Chapter Bankruptcy Lawyer

If your business is facing an uncertain financial future and you are considering filing bankruptcy to protect the best interests of your company, contact the Boston Chapter 11 bankruptcy lawyers of Joshua Spirn and Associates at 1-800-975-5346 to discuss your situation.