Madison Business Owners: Reorganize and Continue Operating with Chapter 11

Madison business owners facing cash flow problems and mounting debt can use Chapter 11 bankruptcy to restructure obligations while maintaining operations. The Michelson Law Offices assists companies in developing reorganization plans that reduce debt burdens, renegotiate unfavorable contracts, and establish manageable payment schedules. For small businesses with debt under seven and a half million dollars, Subchapter V offers a streamlined process with reduced costs and faster confirmation.

Unlike liquidation, Chapter 11 allows your Madison business to continue serving customers and generating revenue during the bankruptcy process. The automatic stay protects the company from creditor lawsuits, foreclosure on business property, and aggressive collection efforts. You retain control as debtor-in-possession, managing daily operations while working with creditors and the court to finalize a reorganization plan. This approach is designed for businesses with viable operations that need relief from unsustainable debt loads.

Subchapter V of Chapter 11, created specifically for small businesses, eliminates many procedural hurdles and expenses associated with traditional Chapter 11 filings. Madison businesses with total debts under seven and a half million dollars can use this framework to confirm a reorganization plan without forming a creditors' committee, reducing administrative costs and accelerating the timeline. The plan must be filed within 90 days of the petition, and a trustee is appointed to facilitate negotiation rather than assume control of operations.

The reorganization plan proposes how debts will be paid over a three- to five-year period, typically prioritizing secured creditors and essential vendors. Unsecured creditors often receive reduced payments, and the plan can modify loan terms, extend repayment periods, or reduce interest rates. Once the court confirms the plan, your Madison business operates under the new terms, making regular payments to the trustee who distributes funds according to the approved schedule. At the end of the plan, remaining dischargeable debts are eliminated, and the company emerges with a sustainable financial structure.

If your Madison business is struggling with debt under seven and a half million dollars and you need a restructuring solution, schedule a consultation to review your debts, cash flow, and Subchapter V eligibility.

Chapter 11 bankruptcy provides Madison businesses with legal protection from creditors while they develop and implement a reorganization plan. The process allows companies to renegotiate leases, reject unprofitable contracts, and restructure debt—all while continuing to operate. For small businesses, Subchapter V delivers these benefits at a fraction of the cost and complexity of traditional Chapter 11 proceedings.

• Continued business operations during the reorganization process
• Immediate protection from creditor lawsuits and collection actions
• Streamlined Subchapter V process for businesses under seven and a half million in debt
• Ability to renegotiate leases, contracts, and loan terms
• Madison businesses emerge with reduced debt and sustainable payment obligations

The success of a Chapter 11 reorganization depends on accurate financial projections, creditor cooperation, and a realistic repayment plan. Many Madison businesses use Subchapter V to restructure quickly and return to profitability within months. For guidance on Chapter 11 bankruptcy and business debt restructuring in Madison, connect with a team experienced in small business reorganization and Subchapter V filings.