When a business is having financial difficulties, there are a lot of options on the table to help them navigate through these rough waters. One of these choices is Chapter 11, though this doesn't necessarily mean that the company itself will have to shut down because they filed for bankruptcy. No matter what choice is eventually made, there are often many parties that are affected by the bankruptcy -- not just the company itself.
Understanding Chapter 11 as a small business owner
Chapter 11 bankruptcy is often thought of as a filing that is meant only for corporations and big companies. However, Chapter 11 is also a possibility for smaller businesses, and indeed Chapter 11 filings are largely made up of smaller businesses. In this context, a small business is defined as having 500 employees or fewer.
Consider these factors before filing for bankruptcy
Whether you are an individual or a business, filing for bankruptcy is never as straightforward as you may hope. Now, that shouldn't discourage you from filing if you really need the protection that bankruptcy offers. But it is meant to make you think. There are a lot of questions you need to ask yourself if you are running a business before you file for bankruptcy.
