Recovering after filing for Chapter 11 bankruptcy in Illinois

Filing for Chapter 11 bankruptcy may not be an easy step, but it is sometimes a necessary one. As the Illinois Attorney General points out, through filing for Chapter 11, a business can still maintain control of its assets and reorganize. Moving forward, a business owner can remain operational and start the recovery process. Businesses may also be able to file for Chapter 7, which will discharge all debts. For many companies, however, this will mean halting operation and closing the business.

According to a report in The Huffington Post, the U.S. Small Business Association conducted a study that evaluated small businesses that file bankruptcy. The SBA found that within seven years of filing, many of these companies went on to be successful. Owners should keep in mind that business bankruptcies usually do not appear on their personal credit reports. However, if an owner's personal accounts were tied to business debts, his or her personal credit score could be affected.

The Huffington Post offers the following advice to business owners trying to get back on their feet following a Chapter 11 bankruptcy: 

  •        Find alternatives for financing, such as SBA microloans or secured credit cards.
  •        Acquire new vendor contracts, opting to work with smaller entities that may be more sympathetic to the situation.
  •        Ask vendors to let the business credit bureau know about the company’s good standing to build credit.
  •        Business owners should check their credit reports to ensure accuracy and make all future payments in full and on time.

Business bankruptcies can stay on a credit report for up to 10 years. Experts recommend focusing on the future instead of the past in order to rebuild a company.

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