If you are a Maryland small business owner struggling to stay afloat, you may be searching for options to keep your company open. Depending on your specific situation, bankruptcy may provide the breathing room you need. At The Law Offices of Richard B. Rosenblatt, PC, we frequently assist clients in finding the best resolution to their debt problems and help them get back on track.
According to Chron, Chapter 11, also known as “reorganization bankruptcy.” While it can be more complicated and expensive than Chapter 7, this option offers protection from creditors and allows your business to continue operating while you get the finances in order. The court requires detailed information regarding your financial situation, the obligation to creditors and assets before debt restructuring can take place.
Typically, you have 120 days to write and submit a strategy for addressing your debts. Not only must you receive court approval, but creditor must also approve the plan. In many cases, creditors make counter-offers or point out potential issues regarding feasibility. Collaboration between you, the court and creditors help finalize the reorganization plan.
Although your business can continue its operations and ownership does not change, there is oversight by outside parties. The U.S. Trustee’s Office appoints a trustee to help you adhere to the approved plan. They report to bankruptcy court and evaluate your progress. Depending on the restructuring requirements, you may have the power to set aside specific transactions that occurred in the year leading up to bankruptcy. Visit our webpage for more information on this topic.