Live Chat
During This Challenging Time

We are open for business and remain dedicated to your case! All those working on-site and remotely are still available to answer your questions. The well-being of our clients and staff are vital, so we will provide updates as the situation progresses.

During This Challenging Time Close

Chapter 11 Can Help Turn Around A Small Business

June 25, 2012

For many people Chapter 11 bankruptcy conjures up thoughts of General Motors or Washington Mutual. Fortunately, Chapter 11 bankruptcy is not just reserved for billion dollar corporations, but is a useful tool for many small companies suffering from financial distress that need to reorganize.

Chapter 11 of the Bankruptcy Code contains special provisions designed for small businesses. Generally, to qualify for these special bankruptcy procedures the small business must be engaged in commerce with debts less than $2.19 million. The small business must file a bankruptcy petition and include (1) the most recent balance sheet; (2) a statement of operations; (3) a cash flow statement; and (4) the most recent tax return.

The federal law imposes an automatic stay after the Chapter 11 case is filed that prohibits all collection actions against the small business. This stay halts lawsuits, assets seizures, and other legal actions. Normal business operations continue under the court’s supervision during the pendency of the bankruptcy.

The goal of the Chapter 11 is to obtain a court-ordered plan to repay some or all of the company’s debts over time. The business debtor’s plan may propose to pay a percentage of the debt, or change the terms of leases and contracts. In general, the court will confirm a plan that is feasible, proposed in good faith, and complies with the legal requirements under the Bankruptcy Code. Creditors must also receive as much as it would if the business’s assets were liquidated.

Chapter 11 bankruptcy offers financially distressed small businesses an opportunity to continue operations while restructuring debts. If your company could benefit from Chapter 11 of the Bankruptcy Code, contact an experienced bankruptcy attorney and discuss your options.


Use the form below to send us a note, call us at 214.890.0711 or chat with us live. We are eager to help with your legal needs. Please keep in mind that any unsolicited information sent through our website cannot be treated as confidential. Contacting us through this site does not create a representation relationship with Fears Nachawati.

Contact Us


With offices across Texas, and attorneys licensed in Texas, Florida, Arkansas, New Mexico, California, Illinois, District of Columbia, Missouri and Oklahoma, Fears Nachawati is dedicated to attaining the best possible solutions for our clients’ business and personal needs. We strive to be professionals who are creative, empathetic and reliable.

All Areas Served

We Can Help

Contact Fears Nachawati today

Free Consultation

Live Chat (Online Now)