Business Bankruptcy Lawyers
Business Bankruptcy Lawyers can help companies to find out options on how to continue to operate despite financial problems. Chapter 11 is the type of bankruptcy that businesses usually choose for restructuring. Companies that are eligible for filing Chapter 11 include partnerships, corporations, and sole proprietorships. Sole proprietors must include their personal assets along with company assets whereas a partnership or corporation just includes company assets. Business bankruptcy lawyers oversee the appointment of a trustee to monitor the progress of the preceding. The trustee holds the meeting with the creditors and makes sure that the company complies with all the requirements set by the court. A debtor has to attend a credit counseling course before he or she can file bankruptcy. In most cases companies who want to continue operating and intend on paying creditors over time can accomplish this by filing Chapter 11.Business bankruptcy lawyers can help with putting the plan together. The trustee and all creditors must be mailed a copy of the plan. Creditors have the right to object to the plan but the court may go ahead and rule in the favor of the company. When a plan is accepted by all the creditors and it qualifies according to Chapter 11 bankruptcy rules it can be discharged. However, the discharge may not happen until the debtor fulfills payments under the plan to creditors or other interested parties.
Once an estate is completely reconciled a final decree can order the case to be closed. Business bankruptcy lawyers know that there are some debts that can not be discharged. These include debts for alimony and child support, student loans or other loans guaranteed by the government, debts caused by personal injury to others, and debts for criminal restitution. This is true no matter what type of bankruptcy is filed. Before a final decree is granted the court may make a determination that the company needs to file under a different Chapter. Another way to file for discharge of financial debts can be done under Chapter 7. Talking to a lawyer who specializes in this field will help a company or an individual decide the best way to file.
Companies usually have two choices when filing bankruptcy. They can liquidate their assets and use the proceeds to pay debts under Chapter 7 or they can restructure under Chapter 11. Business bankruptcy lawyers can give advice on the best options based upon a company’s individual circumstances. After filing Chapter 11 a company can get an automatic stay to keep creditors from legally pursuing them. In addition, an automatic stay suspends judgments, foreclosures, and repossessions of property from taking place. A creditor that has security interest can file to grant relief from the automatic stay. The relief may be granted if the property is not necessary for restructuring. If the property is needed in order for the company to continue operating then the court will probably grant relief to the creditor.
The company who chooses to do a restructuring and reorganization will need to file a plan on how they are going to accomplish this.
Some companies may want to consider filing Chapter 7 in the effort of liquidating assets and paying off creditors. Assets can include anything that has value including property. A debtor will need to supply the court with a list of assets and liabilities along with current income and current expenses. Business bankruptcy lawyers can help the debtor to compile all of this information. A debtor will have to pay a filing fee to the court, an administrative fee, and a trustee surcharge fee. In addition, there must be a list of all of the creditors and the amounts owed to them, a list of all property, monthly living expenses in detail, and all of the sources and amounts of income. Most attorneys have schedules to use to record of all the information needed by the court.
Property can be saved from the liquidation of the proceeding by filing a schedule for exempt property. Business bankruptcy lawyers should understand what the laws are pertaining to exemptions by the Federal government and by the State government in which the debtor resides. If the property is under a lien then the owner of the lien should be informed about the property being exempted from the Chapter 7 proceedings. The owner of the property may want to get advice from an attorney about this matter. The debtor may reaffirm a debt with a reaffirmation agreement in which case the debt would not be discharged but the debtor will continue to pay on it.
An automatic stay stops any collection proceedings from taking place against the debtor. Any pending lawsuits against the debtor must be stopped including judgments, repossessions, and wage garnishments. The meeting of the creditors gives the creditors an opportunity to voice their protests against the Chapter 7. A trustee of the case will take care of the liquidating the assets if there are any. Creditors will need to file a claim to be eligible for payment of the liquidated assets. If there has not been any fraud or any reason to suspect fraud then the debtor is usually discharged of the debts.
Mail this post
For a business filing bankruptcy, there are options that an individual may not have. There are more variables, there are other chapters to consider, as well as the dynamic with investors and partners. If you have more questions, there is help, and you can work with a business bankruptcy lawyer to ensure that you address your potential bankruptcy with accurate information and legal counsel. Need a Business Lawyer? Need a Bankruptcy Lawyer?
Individual and business bankruptcy is entirely different from each other. Businesses use bankruptcy to reorganize their company to avoid bankruptcy. This allows time to turn a profit and retain ownership of all assets. Many businesses can file under chapters 13, 7, 12 and 11 depending on their circumstance.
Limitations apply to businesses that use chapters 12 and 13. Chapter 12 is dedicated to farmers and anglers who operate family businesses. Chapter 13 pertains to proprietary business owners of a small business. Because of these limitations, most businesses file under chapters 7 or 11.
If you feel your business is failing, bankruptcy may be the answer and chapter 7 will allow you to liquidate your assets to settle debts with creditors. A court appointed trustee will help you through the process of liquidation and keeps the money to distribute to creditors after all sales are completed. Creditors are paid back according to federal bank codes.
Understanding bankruptcy in business leads us to look further at chapter 7. Creditors like chapter 7 bankruptcies because they receive as much of their money as possible through the liquidation process along with the legal liability of their claim. The company itself is responsible for taxes in most cases. The chapter 7 expenses and taxes are paid before creditors. This prevents you from incurring any more debt than you already have.
If you feel, your business can be saved but need some time to reorganize and turn a profit, chapter 11 will benefit you by allowing the business to run as usual while trying to become profitable. Any big decisions about the business must have approval from the courts. Some big businesses and corporations such as K-Mart used chapter 11 bankruptcies in order to reorganize and turn a profit. Many companies’s use this course of action and succeed, but some do not make it and lose their business and assets.
Creditors are stopped cold in their tracks from taking any further action against you once you file the bankruptcy papers and this helps a company turn a profit and pay creditors before collection actions further hamper the business. Understanding bankruptcy in business in not much different from a personal bankruptcy, but there are a few things that appear different. If a company needs some time to earn a few dollars, they can just file a chapter 11 and reorganize before losing the company. We really do not have that complete option as personal bankruptcy candidates
By: Wade Robins
Article Directory: http://www.articledashboard.com
Mail this post
For a business filing bankruptcy or contemplating business bankruptcy, first all options should truly be exhausted. As a small business owner, do you have the ability to work with your creditors, find additional financing or loans, or even work with friends and family to assist you during a rough spot.
In fact, I know one small business owner that took advantage of a small business owners group in their community with whom she was able to network and get a variety of “experts” to help her evaluate her business, cut costs, figure out how to best schedule her labor, and other tips, tricks and advice that actually helped her turn her business around and avoid bankruptcy which she thought was inevitable. Contact a business bankruptcy lawyer in your area to discuss all of your options, and leverage small business groups in your community to partner with some other business owners who may be able to provide you with sage advice and guidance on how to avoid bankruptcy.
When your business runs into troubled waters where you have borrowed money, incurred huge debts and are now unable to repay these obligations, the instant solution that comes to mind is that of filing for Business Bankruptcy. The lure of starting afresh, after seeking solace in Chapter 11 is always more appealing than trying to find means to clear the debt trap that you have fallen into.
However, no matter how grave the consequences, it is often better to say no to Business bankruptcy. Bankruptcy should be considered only as a last resort and out-of-court restructuring alternatives should be given a thought.
The primary reason, people avoid filing for bankruptcy is that it will lead to them losing direct control over their business. Once you start functioning under the umbrella of Chapter 11, there will inevitably be other creditors and new masters ready to take on your share of control as well as decision making powers. The company will be put under tremendous constraints which many third parties like vendors, landlords, service providers etc who have a vested interest may start acting on, as well. Moreover, the debtor will have to start explaining how and why so many things are being done while at the same time have to seek the court’s approval to succeed.
Another important feature of filing for business bankruptcy and the reason one must try to avoid it is the expenditure it incurs. Not only does it take too long to get all the procedural matters sorted out, but it turns out to be a costly affair. A bankrupt company will need to find expert legal counsel, the rates of which may truly be unaffordable. Additionally there will be business advisors, filing fees, administrative expenses, all of which can run up a huge tab.
The resolving of bankruptcies can take far too long which tends to be another reason to avoid them. Moreover the process is slow, tedious and cumbersome. The management will be obligated to spend a significant amount of time planning for and attending court hearings to get the approval of actions that they want to take and therefore ending up spending little time actually running the business. This may lead to lost opportunities in business, another chink in the armor of bankruptcy.
The long drawn out process of bankruptcy laws combined with the uncertainty it accords, also leads to employee dissatisfaction and low employee morale. This may lead to high attrition rates, which in turn lead to high attendant costs. Hiring and training new employees increases the burden of costs and reduces motivation levels considerably.
Given all the above factors, bankruptcy is a risky decision. Obviously, the reorganization of a company under Chapter 11 is designed to create a fresh start and preserve or enhance business opportunities, but often the process can be quite damaging, perhaps as much as the initial problem and reason of bankruptcy.
Certain industries and businesses are totally averse to filing for bankruptcy. Companies, typically, in the large-scale, long-term construction industry are not good candidates for Chapter 11. One reason for this is the risk of continued payment or progress billing for the work being done. Another reason is that subcontractors may have the right to lien property if they are not fully compensated. Thus, the potential benefits that may accrue as a result of the debtor company being able to avoid immediate payment for certain pre-petition obligations are greatly limited. Lastly, it is difficult for a debtor in the large-scale company contracting business to bid for and win new businesses when under the Chapter 11 clause. Most potential bidders are likely to turn their backs on such cases.
An out-of-court restructuring alternative should be considered as opposed to business bankruptcy as it is not only attainable, but because it can be done relatively faster, with less extraneous activity as well as less expense. Also, because a company is dealing directly with its most important creditors it tends to be a better option. While the pool of interested parties becomes smaller, it also means that the financial losses are not shared as equally as it usually is in a Chapter 11. In these situations, solid planning and communication with the major stakeholders is critical. All in all, business bankruptcy may not be the best solution to a company under-performing. It should be taken only as a last resort solution only when all other options are exhausted.
Author: William Brister
Article Source: http://EzineArticles.com/?expert=William_Brister
Mail this post
For a business filing bankruptcy, or on the verge of filing bankruptcy, information and knowledge is power. The business bankruptcy process is complex and complicated, not to mention time-consuming and even emotional for many small business owners who are facing the potential end of their small business dreams. A business bankruptcy lawyer can provide you with sound legal counsel and legal representation for this process, and may be able to help you save your business, and emerge from the business bankruptcy with a viable and profitable business.
The question of what exactly happens when a business files bankruptcy is something that any business owner should be aware of, since it is different than when a consumer files for personal or individual bankruptcy.
Unfortunately, the reality is that many businesses file bankruptcy each year. There are many reasons this happens, but outside of a partnership where one of the partners runs off with the business money (which is a legal matter), there are various reasons that this is the case. Very often this is due to inadequate market planning, and the second most common reason is financial mismanagement.
For market planning, anyone planning to open a business must do enough market research in the particular geographic area where they plan to open this business to make sure that there is sufficient demand for the products and services that will be offered. This is not just a couple of days worth of effort with surveys handed out during lunch time at the mall, but can often take weeks to complete adequately to ensure that there really is a market in this area that can sustain the business on an ongoing basis.
For financial mismanagement, this should not be construed as being necessarily a negative thing, but businesses are required to file a lot of paperwork with both the state in which they operate as well as the government. There are payroll taxes that need to be paid, filing fees, and this cannot be put off since there are rather stiff penalties that will cost even more money if these things are late. Many times a business will spend money on expansion in terms of equipment, computers, trucks, etc, before they are really ready to take on that financial obligation.
When a business files for bankruptcy, the impact is typically much more severe compared to when an individual consumer files bankruptcy, especially if the business is going to file Chapter 7 bankruptcy. The business must meticulously list each and every tangible asset that is attributed to the business, as well as listing all of their debt. If the business has bond holders and/or mortgage lenders that money is owed to, the business owner needs to be aware that these debts will not be discharged in a bankruptcy.
A creditor to whom the business owes money will typically secure the value of the outstanding balance via the assets of the business, and can in fact force the business to be dissolved. This can be catastrophic, especially in a smaller business since employees are usually the first ones to feel the impact, and it is not unusual for those employees to see what is about to happen and seek employment elsewhere before the axe falls. If there is outstanding payroll due any employee, unfortunately that employee must stand in line behind creditors to try to collect, and the reality is that they will never see that paycheck.
Typically, the most common type of business to go bankrupt in the US is restaurants. While a restaurant is one of the easiest businesses to open, it is also one of the most difficult to maintain and keep operationally profitable. If a restaurant does not have the customers to support the business, they have a huge amount of potential food that they have ordered and paid for which they will need to throw away. Employees are affected as well as the suppliers who sold goods to the business, and this eventually starts a chain reaction that unless the business owner is very financially savvy, can reach a point of no return before the business owner is even aware of it.
The best advice to give to a business owner considering bankruptcy is to become intimately knowledgeable about bankruptcy law. The law has changed significantly in recent years, and the more the business owner understands about his options, the less painful the whole procedure is going to be.
Author: Jon Arnold
Article Source: http://EzineArticles.com/?expert=Jon_Arnold
Mail this post
For a business filing bankruptcy, all of the business partners are in some way impacted. Consult with a business bankruptcy lawyer to understand how your bankruptcy filing can impact your business partners and what they need to do to protect themselves, their interest in the business and how you can maintain a business partnership going forward.
If you own a business that is registered as a partnership, and you find yourself in the position of having to file for personal bankruptcy protection, what happens to your business? Does personal bankruptcy have to mean small business bankruptcy as well?
Owning a partnership means that your personal and business finances are one and the same. It also means the same for your partners. Each partner is responsible for the entirety of the business’s debts.
Since your personal debts and your business debts are the same, they cannot be separated when you file for bankruptcy protection. This means that your personal assets and your business assets will both be listed in your bankruptcy paperwork.
Many of your personal assets will be considered exempt under a Chapter 7 bankruptcy – meaning that you will get to keep these assets even though you are wiping out your debt. Unfortunately, this is usually not the case when it comes to business assets. Most of these assets will become the property of the estate, and will be liquidated to pay your creditors for your debt.
Unless your partners can replace these assets, this usually means that your partnership will have to shut down. There are a couple of options that can save your business, though. First, you can file for Chapter 13 bankruptcy protection instead of filing chapter 7. This gives you the ability to repay your debts over a period of time – usually 3 to 5 years. Although Chapter 13 doesn’t erase your debts, it will allow you to keep your business assets so that you and your partners can continue operating the business.
The other option is to incorporate the business. This will help separate your personal and business liability. While the estate will become the owner of your share of the business when you file bankruptcy, you have the option of buying back your stock at fair market value. Often, the fair market value will be less than the amount of debt you owe, so it can be a less expensive way of obtaining debt relief while still maintaining your business.
Author: Jay Fleischman
Article Source: http://EzineArticles.com/?expert=Jay_Fleischman
Mail this post
With a business filing bankruptcy, much of the success or failure of the bankruptcy is on how well you and your business interests are represented by your business bankruptcy lawyer. You need to be prepared to find the right one, using referrals, asking questions and understanding how they will counsel and represent you. Your business bankruptcy attorney works for YOU, so make sure you do your due diligence to find the best one.
You must seek the professional guidance of a business bankruptcy lawyer if you are filing for business bankruptcy. Filing for business bankruptcy is very complicated, as there are so many factors to take into consideration. You obviously want everything to go smoothly and a business bankruptcy lawyer is there to ensure that everything goes smoothly.
Find A Good Lawyer
Your first job when you file for business bankruptcy is to find yourself a good and professional bankruptcy attorney who specializes in business bankruptcies. You do not want to do this at the last minute, because you would then end up settling for a mediocre attorney. Furthermore, your business bankruptcy lawyer will not have enough time to prepare your case.
To find a good attorney you can go online and do some extensive research on online bankruptcy lawyer. Make a list of names that you think are worth considering and interview each one of them. Your friends or family members, who have gone through a similar experience, can also recommend you a name. Your personal lawyer is another person whom you can ask for referrals.
If you are not clear about the kind of corporate bankruptcy legal representative or business bankruptcy lawyer you want, it would help you to spend a day or so at the bankruptcy court. Watch the lawyers representing their clients. You will then know the kind of lawyer you want.
Interview
When you go to interview a lawyer, do not hesitate asking all sorts of questions relating to your case. Inquire about his/her years of experience. Ask whether he/she has experience in handling your type of cases or not. Also pay attention to the type of office the lawyer has. An untidy and unorganized office is a negative reflection on the capability of a lawyer. Thus you should stay away from such a legal representative.
After you have chosen your bankruptcy attorney, it would help you to find out more about business bankruptcy. Your knowledge on business bankruptcy will empower you to take the right decisions at the right time. Your attorney would be able to provide you all the information that you need on the subject. Inquire especially about Chapter 7 and Chapter 11 of bankruptcy, because they deal with business bankruptcy.
Chapter 7 deals with the liquidation of assets. When you file for Chapter 7, the court will appoint a trustee, whose main job is to sell all your assets. Under Chapter 11, US Trustee will appoint one or several committees, who will come up with a reorganization plan.
Your business bankruptcy lawyer is the best person to guide you when it comes to deciding which chapter to file for. Right decision at this time will ensure that the bankruptcy process goes smoothly for you.
Author: Ashlay Tyler
Article Source: http://EzineArticles.com/?expert=Ashlay_Tyler
Mail this post
For a business filing bankruptcy, there are a few options. You should consult with a business bankruptcy lawyer to ensure that you are selecting the right option for your business, kind of business, amount of business debt and whether or not your business would be viable once it emerges from the bankruptcy.
No doubt, this is a tough economy, and many small business are struggling. However, with the right business bankruptcy attorney, you may be able to save your business and continue to live the dream of being a small business owner.
Small businesses can sometimes have difficulty in succeeding in the global competitive market. They can sometimes face financial problems and filing for small business bankruptcy may seem the solution. However, before filing, business owners should know what type to file.
There are three bankruptcy types that business owners can file depending on the type of business they have.
First, Chapter 7 bankruptcy or liquidation: This is the best choice for businesses having no possible future. This can be filed by sole proprietorships, wherein the owner is responsible for all assets and liabilities of the firm, and corporations and partnerships, which have legal entities separated from the owner. This is also filed when a company has too many debts that restructuring is not possible or if the company does not have any substantial assets. For small business bankruptcy, this type could mean that the business is over.
With liquidation, a trustee is appointed to take possession of the assets of the business and distribute them among the creditors. The sole proprietor then receives a discharge or is released from any debt obligations at the end of the case.
Second, Chapter 11 bankruptcy: this is best suited for companies, which still have a possible future. Sole proprietorships, and corporations and partnerships can file this. But this is complex and success is sometimes minimal.
For small business bankruptcy, this type means the company plans for reorganization and continuation of the business. Nevertheless, reorganization is done under a court appointed trustee, the owner of the company, and will be shown to creditors. Creditors will vote on and approve the plan. The plan will provide a period for the company to pay their creditors. However, confirmation can sometimes take a year to finalize.
Third, Chapter 13 bankruptcy: this is usually reserved for consumers. However, this can also be filed by sole proprietorship. Small business bankruptcy of this type entails the firm to submit a repayment plan stating how the company will repay the debts. Repayment depends on earnings, debts and property ownerships. Filing this type could save the owner from losing personal assets.
Small business bankruptcy can be a solution to a company’s debt but before deciding to file, consult an attorney first. They can recommend the type to file and might even recommend other options that will help save your company without filing.
Author: Naomi Smith
Article Source: http://EzineArticles.com/?expert=Naomi_Smith
Mail this post
How To Keep Your Business Out Of Bankruptcy
Businesses Filing for Bankruptcy presents the following thoughts on how to keep your business out of bankruptcy. There are alternatives to filing for bankruptcy, contact a bankruptcy attorney in your area to know all of your options.
It is very easy to drive your business towards bankruptcy and debt and a very, very hard to get out of it. Debt consolidation is the most convenient way to ensure your business with a cash flow when you need it.
Maybe you are the owner of the business that has borrowed big amounts from lenders but have the trouble paying them back the money you owe them. Such things happen for a lot of reasons, some could be controlled by you while others are out of your control. For example you could have invested in an unprofitable enterprise or your company could have experienced a growth so fast that it has outgrown its operating capital.
Whatever the cause of your financial problems may be, there are debt consolidation companies that can help a business like yours to run financial assets more efficiently. Another plus of hiring these companies is that they are actually cheaper then hiring your own CPA. What debt consolidation will do for your company is reorganization of your debt in order to enable a more efficient cash flow for your company.
Debt consolidation of your business debts will make it possible to merge your debts and loans in one low interest payment instead of many payments with high interest. Debt management company is going to use that lump sum and will actually act as a manager of your company debts.
Debt management companies are much better way to solve your financial problems then filing for Chapter 11 bankruptcy as it is traditionally done. What filing for bankruptcy under Chapter 11 will do is that it will cause a huge delay together with high cost expenditures.
Before any step is taken towards the debt consolidation you will need to hire a professional and go through the debt consultation. Another waist of time is waiting for a plan approval by the Trustee. That alone can take months or even years. And in most cases a company doesn’t have that much time to lose.
In many points business debt consolidation is very similar to a student loan consolidation. In case of student loans, as graduate you are in position to hire a debt consolidation expert to help her/him with combining all of the many student loans in just one with significantly lower interests.
A graduate will then pay off hers/his debt much easier on monthly basis through much longer period of time. Looking at it from a long term perspective it will enable student to save significant amount of money that can be used elsewhere or for investing. The same principle can be applied for business debt consolidation.
What you should avoid is getting deeper in debt by applying for more loans, you can always find a lender wiling to loan you the money, but with a very high interest rates. You can think about borrowing the money if you know for certain that your profits will rise for a long period of time and that is very unlikely.
Another way to get financial help is to go through credit union. Credit unions are a good solution because they will work with you to prevent business bankruptcy and pay back your debts and not against you as loans sometimes can.
By: Nikola Govorko
Article Directory: http://www.articledashboard.com
Mail this post
Bankruptcy Law And How To Get Your Credit Back
by: Derek Gardner
Businesses Filing for Bankruptcy offers the following thoughts on how to get your credit back after bankruptcy. There are alternatives to bankruptcy, ensure that you work with a top bankruptcy lawyer in your area to explore and understand ALL of your options!
Personal Bankruptcy what is it?
Personal Bankruptcy is legal procedures that enables a debtor to for the time being or lastingly avoid paying some of their personal debt unpaid. The US Congress enacted the existing bankruptcy code in 1978, and newly amended it in the spring of 2005.The objective of the legislation is to give relief and structure to those people of society who have gotten themselves so deep into debt they can not possibly pay back. Currently there are 2 forms of bankruptcy that are available for individuals: chapter 13 & chapter 7.
Will you be able to get credit again?
Undoubtedly, the banks have become better at working with people who have filed for personal bankruptcy. You can get a new kind of protected credit card, where a deposit is made to cover the line of credit. This card is the start of the process of credit restoration. Within a couple of years, the banks will start giving you credit again.
What about my creditors?
You might worry about your creditors harassing you, and if they will ever get off your back. They will! By law all activities against a debtor must end when bankruptcy papers have been filed with the government.
Will anybody know that I filed?
Very few people will know that you have filed for Bankruptcy. The file goes into the public record. Credit bureaus will keep a documentation of your filing for 10 years.
Changes made to the bankruptcy laws?
The "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" was passed by congress in spring of 2005 and will be effective on October 17th, 2005. The purpose of the act was to force people who have enough money to make some of the payments on their debt make those payments instead than steer clear of the debt all together. The major changes are:
Tests are performed to identify the ability of the debtor to pay their debts. The tests are: Is the family earning higher than the average income for their state? If yes, does the family have enough income to pay some or all of their debts?
Debtors wishing to filing for bankruptcy must give the government their most recent tax return.
A minimum 2 year residency is required to take advantage of state exceptions.
Counselling: Debtors must have completed a federally approved credit counselling program within the six months prior to filing.
Child support and Alimony payments were moved to first priority when dividing the income.
About The Author
Derek Gardner
Mail this post
Small Business Filing Bankruptcy
Businesses Filling for Bankruptcy offers the following thoughts on small business bankruptcy. There may be alternatives to bankruptcy, so contact a bankruptcy attorney in your area to help walk you through all of your options.
Small business bankruptcy may be the most responsible way to alleviate financial debt without losing everything.
Read more…
Mail this post
