Nobody enters the decision to file bankruptcy lightly. Filing bankruptcy can have long-term consequences for a business and creditors may be worried about whether they will receive payment for unpaid debts. Bankruptcy mediation can provide much-needed relief to businesses that are struggling financially during this difficult time. Here are the essential things you should know about Chapter 11 bankruptcy:
You Can Continue Operating Your Business After a Chapter 11 Bankruptcy Filing
One of the most important aspects of filing for Chapter 11 bankruptcy protection is that you can continue to run your business while your case is pending. Judgment creditors may otherwise be able to take action against you, including stopping your operations. This type of bankruptcy protection ensures that you are able to continue earning income during this difficult time.
An Automatic Stay Is Put in Place
When you file for bankruptcy protection, an automatic stay is put in place. This stay prevents creditors from taking any further collection efforts for debts that arose before the bankruptcy filing. Judgment creditors have certain rights, which may include the ability to directly take money out of your till, to foreclose on your commercial property, or to attach a lien on your property. Sometimes, creditors may be able to get your business to stop operations. However, when the automatic stay is put in place, these collection efforts must cease. If they have not yet commenced, they can be delayed or eliminated. This gives the business the opportunity to focus on resolving outstanding debt and restructuring the business that caused the financial issues in the first place.
You Have Choices
With a Chapter 11 bankruptcy, you have options about how to proceed with your business, including:
- Restructure your business and continue operations
- Sell your business assets
- Liquidate your assets
An experienced Miami bankruptcy mediator can work with you and your creditors to determine what options are best for all of you. Bankruptcy mediation is premised on the principle that it is possible to reach an equitable resolution in which all of the parties’ interests are met. By working together with your creditors – instead of devolving into expensive, time-consuming, and unproductive litigation – you can resolve your dispute, often for much less time and money.
By seeking business bankruptcy protection proactively and working with a knowledgeable business bankruptcy mediator, you can increase the odds of having a successful outcome in your case.
Business Bankruptcy Mediation Can Provide You with Many Benefits
Business bankruptcy mediation provides you with many key advantages. Many businesses that must file bankruptcy may have had ongoing relationships with their banking institution or other creditors for years. They do not want to harm them in any way, but they may not have the funds necessary to pay a debt in full. By providing a supportive environment that focuses on respectful communication, the parties are often able to work out solutions that allow them to demonstrate mutual respect and dignity. This may encourage them to continue a civil relationship well after the bankruptcy case is over.
Business bankruptcy mediation also provides prompter results. During this uncertain time, there are many bankruptcy filings, which will likely clog court dockets for years to come. When the debtor and creditors agree to business bankruptcy mediation, the process can often be resolved much faster than going through litigation. Additionally, the parties can avoid the expensive costs associated with litigation, such as discovery costs, trial preparation, and motion practice charges.
A Chapter 11 Bankruptcy Mediator Can Help
You do not have to go through this difficult time alone. A Miami Chapter 11 bankruptcy mediator and settlement counselor can guide you through the process and ensure that you receive all of the many benefits of the mediation process. Contact Francis L. Carter, P.A. at (305) 776-9143 to learn more about how we can help and to schedule your bankruptcy mediation. We are currently offering virtual mediations with enhanced video conferencing capability to assist our clients during this challenging time.
