Wisconsin business owners know they have two main ways to file for bankruptcy relief under the U.S. bankruptcy code if they find themselves with more debt than assets. Under Chapter 7, all company assets are sold to pay off debt and all business operations end. A Chapter 11 filing, on the other hand, may be more sensible because it allows a business to continue operations after undergoing financial restructuring.
Filing for Chapter 11 bankruptcy is one of the most critical decisions business owners can make, so they must clearly understand the consequences of this type of business bankruptcy. Several factors, including the amount of accumulated debt and the interests of the business owner, are evaluated to see if a Chapter 11 restructuring plan is feasible. If restructuring is chosen, the business may later resume operations.