Oklahoma Commercial Bankruptcy Overview
When the economy turns downward, especially when that downturn is historically precipitous, businesses of all sizes suffer. When credit markets disappear, cash becomes scarce and companies tighten their budgets, it always leads to serious problems for businesses in just about every market. Given the reality that the American business world is facing, many entities find themselves with seemingly nowhere to turn.
However, there are options for businesses, and one of them is the commercial bankruptcy route. Below you’ll find information regarding the different types of commercial bankruptcy filings, the process that goes into the choice that a business would make between these commercial bankruptcy options, the benefits of filing for commercial bankruptcy protection and finally how you should proceed if your company needs help putting an end to these financial problems.
Commercial Bankruptcy Options for Oklahoma Business
When a business is behind with their creditors and it’s clear that it will not be able to catch up to the delinquencies, the next step can be bankruptcy court either because the business decides to file for protection or because the business is sued into bankruptcy by its creditors. Regardless of how the initial step is taken, the business has two options for commercial bankruptcy pathways:
- Chapter 7 – Even though Chapter 7 filings are typically known as individual bankruptcy cases, businesses can also pursue protection under this chapter of the United States Bankruptcy Code. The process is essentially the same, in that the business must liquidate its assets in order to satisfy creditors as much as possible. Relatively speaking, Chapter 7 cases are simpler than the option that will be presented below and tend to move to completion more quickly.
- Chapter 11 – A filing for commercial bankruptcy protection under Chapter 11 of the Bankruptcy Code is by far the more well-known type of filing for businesses, and there are many reasons for this prevalence. First, a Chapter 11 filing can allow a business to continue to run – with a degree of oversight – while the case proceeds. Secondly, the business can eventually continue on after the case is complete, which is commonly known as ‘emerging from bankruptcy.’