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Do I have the option to reorganize my Florida business?

Starting a business takes a lot of hard work. From hiring staff to finding the right location, a Florida business owner has no shortage of steps to take to get a business up and running. Keeping a business running successfully is another task entirely. From paying bills to dealing with unforeseen emergencies, Orlando business owners may face many hurdles that present financial challenges.

A business owner may find that his debts are overwhelming him to the extent that he is unable to pay his creditors, but still wants to keep his business running. What are the options? One option is Chapter 11 bankruptcy, also known as business reorganization. This form of business bankruptcy is a great option for a business owner who wants to repay his creditors while still continuing to operate his business.

A person who files for Chapter 11 bankruptcy has the right to file what is known as a plan of reorganization within 120 days of filing for bankruptcy. Under the plan of reorganization, the debtor must provide information to his creditors regarding the reorganization to allow the creditors to evaluate the sufficiency of the plan. Though the creditors will obtain this information, it is a court that will either approve or disapprove the reorganization bankruptcy.

If the court approves the reorganization, a business owner will be allowed to discharge some debts while repaying others. Additionally, under court approval, the debtor may be able to end particularly difficult contracts or leases, as well as restructure business operations such that an owner can resume operating with the goal of being profitable again. This form of commercial bankruptcy allows a debtor to consolidate his or her operations with the end result of having a reorganized business and less debt.

The idea of reorganizing a business to reduce debt in this manner is a simple idea, but there are many complex business bankruptcy issues that may arise in the process. It may be beneficial to have the guidance of an experienced attorney to help facilitate the process of reorganizing through bankruptcy.

Source: uscourts.gov, "Process - Bankruptcy Basics," accessed July 3, 2015

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