Posted on May 08, 2007 on www.articlebase.com
Whether you have been in business for a long time and are now facing new and very strong competition from a chain, or you are operating a new venture that just has not gotten off the ground, when the enterprise begins to experience serious business debt problems, you will probably consider bankruptcy. The United States commercial bankruptcy statutes are in place and Chapter 11 proceedings are specifically aimed to aid persons who are trying to pay their business debt, but are unsuccessfully struggling to do so. But Commercial Bankruptcy may not be the answer you are looking for.
It may be that the business debt help you receive from a business debt management consultant may be a better route to meeting the financial obligations and getting the venture back on track. A reorganization of the venture's finances such as businesses debt consolidation or a business debt settlement may provide the real relief that is needed without petitioning for formal Chapter 11 business bankruptcy protection.
With this in mind, it is required that a person seeking chapter 11 Commercial Bankruptcy prior to filing and a business management plan is developed to file in addition to the petition. There are two forms of bankruptcy protection offered. Chapter 13 is incorporated for individuals who have a debt limit of $175,000 but it can be and often is extended to individuals who operate a small business.
But the most widely used Commercial Bankruptcy tool that is designed to give business debt help is the chapter 11 business bankruptcy plan. There is a $1000 fee for filing a chapter 11 business bankruptcy, and the debt management plan must be filed with it. It is a misconception that Chapter 11 discharges business debt; on the contrary, the assets of the business are placed under the guidance of a conservator who will use the business assets to repay the financial obligations over a specified period of time, usually 3 years, if possible.