Business Debt Restructuring
Legal Counsel for Business Debt Restructuring: Miami Bankruptcy Lawyers Experienced in Helping Businesses Reduce Their Debt Load In and Out of Court
While filing for bankruptcy is one option for financially distressed businesses, it isn’t the only one. In many cases, distressed businesses can also restore financial stability through out-of-court business debt restructuring. Miami business owners have several options, and our attorneys have extensive experience helping businesses restructure their debts outside the formal bankruptcy process.
Options for Restructuring a Business’ Debts Outside of Bankruptcy
If your South Florida business is financially distressed, our attorneys can help you evaluate your options and choose how to proceed. While we help our clients reorganize their debts through the Chapter 11 bankruptcy process when necessary, we also routinely help our clients pursue informal debt restructuring alternatives such as:
Forbearance Agreements
Forbearance agreements allow debtors to temporarily stop making payments without going into default. If your business is currently short on cash flow but expects to resume full payments in the future, entering into forbearance agreements with one or more creditors could be a good option.
Composition Agreements
Composition agreements are similar to Chapter 11 reorganization plans, though they are negotiated outside of the formal bankruptcy process. A composition agreement with multiple creditors consolidates a business’ outstanding liabilities into a single, manageable payment obligation. If your business has multiple creditors, this could also be a good option.
Refinancing with a Lower Interest Rate
If your business can afford partial payments on a loan, refinancing to a lower interest rate can also be a good long-term solution. Often, lenders will accept lower interest rates to avoid the costs of default and collection.
Refinancing with a Longer Amortization
If a lender won’t negotiate a lower interest rate, a longer amortization schedule may be a viable alternative. While extending a loan’s amortization can increase the total cost, it can also free up much-needed short-term cash flow.
Debt-for-Equity Swaps
If your business’ creditors won’t refinance, agree to forbearance, or accept a composition agreement, they may be willing to consider a debt-for-equity swap. A debt-for-equity swap won’t make sense in all circumstances, but if it’s what it takes to keep your business solvent, it may be worth considering.
While these are among the most common alternatives to reorganizing under Chapter 11, they are far from the only options available. In many cases, strategic asset sales, expense reductions, and other cash-flow improvements can also be viable and cost-effective options.
How Our Miami Bankruptcy Firm Can Help
We routinely advise owners and executives of distressed businesses in South Florida. If your business is at risk of facing collection action or foreclosure, our Miami bankruptcy firm can:
- Put All of Your Options on the Table – We can help you put all of your bankruptcy and non-bankruptcy options on the table. We can explain the benefits and limitations of each, and we can help you understand what is realistic under the circumstances at hand.
- Provide Strategic Advice Based on Prior Experience – After determining what options you have available, we can provide strategic advice based on our experience representing other businesses in similar circumstances. Our attorneys draw on decades of insight to provide forward-looking recommendations.
- Negotiate with Your Business’ Creditors as Warranted – If you decide to pursue informal debt restructuring, we can negotiate with your business’ creditors directly. After developing a strategy with you, we will approach your business’ creditors and work toward a resolution that meets your business’ needs.
FAQs: Informal Business Debt Restructuring in South Florida
What are some signs that debt restructuring is necessary?
The most common sign that debt restructuring is necessary is when a business is repeatedly unable to meet its monthly payment obligations. However, if a business incurs a substantial liability (i.e., a civil judgment), loses a key customer, or experiences any other event that significantly harms its cash flow, it may also warrant prompt efforts to restructure its debts. Ultimately, if you have concerns about your business’ ability to pay its debts as they come due for any reason, it’s worth exploring your options.
How can I get my business’ creditors onboard with informal debt restructuring?
While there are no guarantees, creditors will often consider informal debt restructuring—especially when the alternative is Chapter 11 bankruptcy. Our attorneys have extensive experience working with businesses’ creditors in this scenario; if it makes sense to restructure your business’ debts, we can approach your creditors with a focus on a mutually beneficial solution under the circumstances.
Is business restructuring also a viable alternative to bankruptcy for businesses that need debt relief?
Yes, along with debt restructuring, business restructuring can also be a viable alternative to bankruptcy in many cases. If restructuring your workforce or operations generates enough additional cash flow to help you avoid defaulting on your financial obligations, this could be a path forward with long-term benefits. Our attorneys can help you explore your options, and we can assist with the legal aspects of restructuring your business as needed.
Have Questions About Business Debt Restructuring in Miami? Contact Us for a Free Initial Consultation
If you have questions about restructuring your business’ debt (or restructuring your business itself) in order to avoid the need to file for bankruptcy, we invite you to get in touch. Our attorneys can use their experience to help you develop and pursue a strategic path forward. To get started with a free initial consultation, call us at 305-768-9909 or tell us how we can help online today.
