During oil field slowdowns many businesses will face financial hardships. Banks, who were your best friend when the money was rolling in all of a sudden become your worst enemy. The banks will take your receivables and foreclose on your assets that you need to remain in business. Businesses can file for Chapter 11 under the United States Bankruptcy Code. When a chapter 11 is filed all collection efforts must stop.
The chapter 11 allows a business to continue in business moving forward and to devise a plan to pay back pre-petition debt. Chapter 11: Reorganization ($1167 filing fee, $550 administrative fee: Total fee $1717) The provisions of Chapter 11 are quite complicated, and any decision by an individual to file a chapter 11 petition should be reviewed with an attorney.