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What restaurant owners should know about bankruptcy

When you decided to open a restaurant, you knew it was a risky venture. Many restaurants struggle and ultimately fail within a few years. Of course, 2020 has been a very difficult year for the restaurant business with mandated shutdowns and capacity limits due to the coronavirus pandemic. In Florida, the number of tourists visiting and spending money at restaurants has plummeted. You may be behind on paying your bills and considering filing bankruptcy.

You aren’t alone. Between March 15 and June 15, restaurants filing bankruptcy outpaced bankruptcy filings in any other industry. In fact, restaurant bankruptcies accounted for 12% of all U.S. bankruptcy filings in that three-month span.

What about filing Chapter 11?

You may want to consider filing Chapter 11 bankruptcy if you want to keep your restaurant operating. Some of the advantages of seeking Chapter 11 include the following:

  • You can restructure your debts, to pay them off over a longer period of time with lower payments.
  • You can seek lower interest rates for loans you secured to pay for commercial equipment, vehicles or real estate.
  • You can reduce the amount of your business’ unsecured debts through Chapter 11 bankruptcy.
  • You will receive an automatic stay, putting a stop to harassing creditor calls to your business and home and potential repossession of your restaurant’s equipment or vehicles.

Getting a second chance

With Chapter 11, you get a second chance. You can take time to relaunch your business and get it operating on a stronger financial footing. You may be able to save your dream of operating your restaurant in a difficult economic environment.

However, if you want to seek Chapter 11 bankruptcy, you should consult with an experienced bankruptcy attorney. An attorney can help you take the right steps to reestablish your business through Chapter 11 bankruptcy.