Not every business that files for bankruptcy is prepared to close its doors. In fact, many Pennsylvania businesses wish to continue their operations despite their financial hardships. When a business is prepared to put in the work and create a plan that will lead to its profitability, that business may find financial success through Chapter 11 bankruptcy.
A recent post on this Cranberry Township bankruptcy legal blog provided a good overview of the Chapter 11 bankruptcy process; this post will focus on different ways a debtor business may create a plan under the bankruptcy process’s terms. There are a number of ways to restructure business debts. An entity may work directly with its loan holders to see if it can lower its payments or reduce the size of its debts, thus making repayment more feasible. Not every creditor may be willing or able to do this, though, so there are other paths a business may take to achieve profitability.
The business may evaluate its own operations to seek out ways that it may become more efficient and cost effective. Often through cost-cutting and making changes to its corporate structure, a business can reduce its debt burden and find more opportunities for paying off its loans. Businesses may even seek out new opportunities that will increase their profits and lead to more money to pay down their outstanding loans. These are only a few of the paths a business may pursue when seeking to restructure, and the needs of different businesses may require different forms of restructuring and reorganization to achieve financial stability.
There are restrictions on what entities may file for Chapter 11 protections, and not all businesses may be able to successfully comply with the process’s terms. To learn more about business bankruptcy and options for freeing a business from the burdens of debt, readers may reach out to debt relief and bankruptcy law attorneys.