Previous posts here have discussed how individual Tallahassee consumers can get debt relief should they get suddenly overwhelmed by unexpected medical bills or an unforeseen job loss or other sudden drop in income. Family businesses that are generally well-run and profitable can also find themselves in sudden income crises, whether it is due to a change in market conditions or just some other financial decisions beyond the control of the business owner. This is often particularly stressful because a Florida resident may have a lot wrapped up both financially and emotionally in his or her family business.
When this happens, business owners can consider filing for Chapter 11 bankruptcy. By filing a petition under Chapter 11, a business will receive temporary protection from debt collectors while it goes about getting its financial affairs in order and negotiating a way to get its debts and underlying financial problems resolved. Assuming it does so, the court will have to approve the business's plan.
Unlike a Chapter 7 or Chapter 13 bankruptcy, the goal of Chapter 11 is to get a business to the point at which it can continue to grow and profit. If a bankruptcy court ever loses confidence that a business in a Chapter 11 can do that, then the court is likely to steer the business toward permanent closure instead.
The court will watch a small business particularly closely to make sure that the business will indeed be able to return to stable financial ground, but this does not mean a Chapter 11 bankruptcy just cannot work for a smaller, family-held business. In fact, there may be some advantages to filing Chapter 11 as a small business. An experienced debt relief attorney can help answer detailed questions about this process.