How can Chapter 11 help protect my business assets?

Chapter 11 bankruptcy is designed for larger businesses (not usually for sole proprietors or even partnerships). The purpose of a chapter 11 is to allow you to restructure your business debt so that you are able to turn a business around and make it profitable. With a chapter 11:

• You do not have to turn over business assets, since the purpose of the chapter 11 is to keep the business running so that you can eventually pay back the debts you owe and become a successful business
• You will have to list all of the assets and debts of the business, and do a great deal of other paperwork, wherein you show how you plan to pay back debts
• Money will be put under the control of a trustee who will assist with the restructuring and repayment of the debt under bankruptcy.

Chapter 11 is widely used by businesses who need to get a better footing on debt but who can ultimately become profitable given a reorganization and a bit more time. It is an alternative to a chapter 7 liquidation bankruptcy. It is also, however, expensive, time consuming and legally complicated. As such, if you plan to file a chapter 11 bankruptcy to save your business assets, you will need to consult with a lawyer for help.