If you are a business owner who has been experiencing financial difficulties, you may want to consider filing for bankruptcy protection. You can do this under either Chapter 11 or Chapter 7 of the Bankruptcy Code. These options can help you save your company from liquidation. However, you will need to understand how each option works before you decide which one is best for your situation.
A good Phoenix Business Bankruptcy Attorney will be able to provide you with legal advice and help guide you through the bankruptcy process. They will be able to tell you which type of bankruptcy is best for your company and help you choose the right chapter.
Chapter 7 – Liquidation
When you file for bankruptcy under Chapter 7, your business assets will be sold to pay unsecured creditors. This may include tax debt, utility bills, and credit card debt. The Chapter 7 trustee is assigned by the court to administer your estate and liquidate your business property.
Chapter 11 – Reorganization
If your company is struggling to pay its debts, you may want to consider filing for Chapter 11 of the Bankruptcy Code. This allows your company to restructure its debts and keep operating.
The process of reorganization is often more efficient than liquidating your business, and it can help you preserve jobs and assets. A reorganization plan can be negotiated with your creditors in order to find a solution that works for all parties involved.
Before you begin the process of filing for bankruptcy, you will need to determine what your company’s assets are worth and whether they are protected by exemptions. If your business has a lot of assets that you want to protect, it is important to talk with an experienced attorney about what your options are.
You should also be aware that if you have guaranteed some of your business debts, you could be personally responsible for paying them. If you are not sure about how you can protect your personal assets from losing them, it is recommended that you consult with a New Jersey bankruptcy lawyer.
Regardless of which strategy you choose, you will need to be able to meet the requirements of the courts. You must be able to meet a number of requirements, including having enough income to pay your debts and meeting a certain percentage of the cost of your bankruptcy case.
In addition, you will need to be able to present documentation to the court that proves the value of your business. This is important to the court because it can determine how much money you will receive in your bankruptcy case.
A good Phoenix Business Bankruptcy Attorney can help you with these requirements and give you the best chance of success. They will be able to guide you through the entire process and make sure that you are able to protect your business assets and avoid the risk of losing them in the process.