It doesn't take much of a change in the economy for a business to be affected. Once an owner falls behind with one creditor, it doesn't take much more to fall behind with most of them. This can leave a business in serious debt that the owner may or may not be able to get out from under. One available option to get out from the debt is to file for Chapter 11 bankruptcy.

Bankruptcy can give a business owner a means to reduce or even eliminate some debt. It also stops all creditor actions against the company, such as repossessions and mechanics liens.

YBT International, an online marketing company, filed for Chapter 11 recently in Illinois. The company listed their assets at $1.31 million and their debts at $7.18 million. The current business plan is to use the bankruptcy to reorganize and start again.

YBT currently is in agreement with a lender for the lender to provide a line of credit to the company to help pay off the debts.

YBT is an internet-based company that began by selling travel service websites to outside agents. In 2009, the company settled a lawsuit with the California attorney general over deceptive marketing.

In 2011, the company sold its headquarters and surrounding property when it faced a fall in revenue. Substantial management changes and canceled mergers have left YBT in its current economic situation.

Chapter 11 bankruptcy works with the creditors and vendors of the company that filed to create a solution to the mounting debt. Bankruptcy will allow the company to create a debt reorganization plan under the supervision of the court. Bankruptcy will reduce interest payments, and the penalties and fees may be reduced or even eliminated.

Source: St. Louis Business Journal, "YBT International files for Chapter 11 bankruptcy," Diana Barr, Mar. 5, 2013