The world of corporate bankruptcy law can be complex and intimidating. Don’t let confusion get in the way of making the best decisions for your company: read on to get answers to the most commonly asked corporate bankruptcy questions.

Q. What is bankruptcy?
A. When a business has financial liabilities that exceed their assets or is unable to meet financial obligations, that company is insolvent—unable to pay their creditors, the company must come to an agreement with their creditors regarding payment or file for bankruptcy protection . This judicial solution gives the courts the power to settle the company’s debts.
Bankruptcy proceedings can be initiated by the debtor or by the creditor (called an involuntary bankruptcy). Filing a bankruptcy petition affects all of your creditors including:

• Secured creditors (those with a lien on your property)
• Unsecured creditors (vendors, credit card companies and others without a security interest in your property
• Judgment creditors (creditors who have sued and obtained a judgment against the debtor prior to the bankruptcy filing)
• Creditors with super priority claims (those with priority over other creditors because of special rules within the bankruptcy)
• Creditors with administrative claims (creditors such as accountants or lawyers with priority because of their assistance in the bankruptcy filing)

Q. What does filing for bankruptcy mean for my business?
A. Filing a bankruptcy petition simply starts a legal proceeding, with no guarantees regarding the outcome. That is to say, the debtor will present evidence of its insolvency, but there is no guarantee that the court will declare them bankrupt. This statutory process gives creditors and other parties the opportunity to challenge the debtor’s allegations and object to the relief being sought by the debtor.
Filing for bankruptcy does immediately put into effect an “automatic stay,” an injunction that stops creditors from trying to collect their debts until the bankruptcy court rules. This stay is issued against all creditors upon filing a bankruptcy petition. The automatic stay is designed to give debtors temporary relief from their financial obligations, giving them the breathing room to figure out how to deal with their debts.
If the courts declare your company bankrupt, then a settlement will be worked out with your creditors to satisfy all or part of your debts. Depending on the bankruptcy chapter you filed under, different rules apply.
Q. What is a business workout?
A. A business workout is a non-judicial resolution of your company’s financial obligations. Business workouts are settlements between a company and its creditors that satisfy the businesses’ debts, enabling it to continue operation. Also known as bankruptcy prevention, these arrangements are made outside of the court system.
While it may be surprising that creditors are willing to participate in business workouts, they’re more likely to receive greater compensation for their debts if your company does not file for bankruptcy. Using an alternative to corporate bankruptcy proceedings benefits creditors as well as the debtor, because some, or even most, of the debt will not be repaid under a bankruptcy proceeding. Secured debt, unsecured debt, and tax debts can all be resolved as a part of a workout.

For additional information about business bankruptcies and your company, contact your area bankruptcy lawyers.

Financial difficulties can make running your business next to impossible—if you’re facing the prospect of filing for bankruptcy protection, there’s a lot you need to know!

Bankruptcy May Not Be Your Only Option

Even when debts are piling up and creditors are harassing you and it seem like there’s no end in sight for your money woes, corporate bankruptcy may not be your only option. There are non-judicial solutions, including workouts and turnarounds, that can be used to satisfy your business debts without declaring bankruptcy. These bankruptcy prevention strategies may be right for your company, so contact your local bankruptcy attorney for specific advice about your particular situation.

You Need a Bankruptcy Lawyer

Filing for bankruptcy without an attorney may seem like a great way to save money, but this plan is likely to backfire in the long run. Keep in mind that your bankruptcy lawyer is a professional with years of experience dealing with the complexities of bankruptcy law. As an expert, he or she has the knowledge and expertise you can rely on to successfully guide you through the bankruptcy proceedings. While it may feel like you’re all alone when your company is in dire financial straits, hiring a corporate bankruptcy attorney means you’ll have a pro on your side! Whether it’s helping you develop a viable alternative to bankruptcy or arguing your case in the courtroom, your business bankruptcy lawyer will be an invaluable asset to your company.

Bankruptcy Should Be a Last Resort

At first glance, bankruptcy may sound like a great idea if your company has financial problems: freeing you from unmanageable debt, bankruptcy protection does have a glimmer of allure. But bankruptcy should not be entered into lightly! In the case of filing a Chapter 7 bankruptcy, your company will be liquidated to satisfy your creditors, eliminating the business you worked so hard to build. Even with bankruptcy filings that don’t dissolve your company, you’ll be saddled with the social stigma of the bankruptcy, creating complications down the road. Bankruptcy can be a resolution for your insolvency issues, but be sure it’s your only option. Your bankruptcy attorney can provide specific advice and guidance, so contact them today

Why should you turn to a bankruptcy lawyer when your business is in trouble? Because these professionals can make the process of filing a corporate bankruptcy easier! Contact your local bankruptcy attorney today.

For many companies facing financial difficulties, the first question that comes up is, “Why should I use a bankruptcy attorney?” Oftentimes the issue is rooted in money concerns, with small business owners wondering if they can afford to hire a bankruptcy attorney. But when it comes to corporate bankruptcy, the better question is can you afford not to hire a bankruptcy lawyer?

To start with, a bankruptcy attorney is a professional in the industry. That means he or she has years of experience dealing with situations like yours. While it may feel like you’re all alone, when you hire a skilled corporate bankruptcy attorney, you suddenly have a professional batting for you. Not only can this expert best argue your side in a courtroom, he or she may also be able to find a bankruptcy prevention solution.

In many cases, it’s easy for business owners to simply become overwhelmed by their financial obligations and debts, and assume that filing for bankruptcy is the only option. However, there are sometimes better alternatives, including financial workouts and debt restructuring. Even if you’ve given up all hope, your bankruptcy attorney may be able to identify an alternative to bankruptcy protection and work with your debtors to resolve your money problems out of court.

Finally, hiring a bankruptcy attorney allows you to focus on rehabilitating your business while he or she deals with resolving your company’s debt issues. From stopping the harassing phone calls from creditors to working on debt restructuring or bankruptcy negotiations, your bankruptcy lawyer can handle all aspects of your debt resolution while you handle the day-to-day operations of your business. Let your bankruptcy lawyer handle the legal stuff while you do what you do best—run your business.

If it does come down to bankruptcy in the end, your lawyer can provide endless help on technical issues such as filing a Chapter 7 bankruptcy versus a Chapter 11 bankruptcy as well as handling the paperwork and negotiations. So no matter how your corporate bankruptcy turns out, a bankruptcy attorney will prove invaluable during the process. Contact your local bankruptcy attorney today for additional information.

When your company is facing debt problems, it can be hard to know if or when to file for bankruptcy. Consulting with an experienced bankruptcy lawyer can help your business determine if it needs to file for bankruptcy.

In the today’s economic climate, an increasing number of businesses are suffering from financial stress. When debt is piling up, it can be difficult to determine if or when to file for bankruptcy protection. The following is concise overview of the issues surrounding bankruptcy, but you always consult a professional bankruptcy lawyer before making any decisions regarding filing for bankruptcy.

When to file for bankruptcy? The short answer is you should try every other solution before filing for bankruptcy.

For small business owners, a business bankruptcy can affect your personal finances. If your company is a partnership or sole proprietorship, you can be held personally responsible for your business debts. That means your personal assets can be used to satisfy your creditors! Of course, in these cases, you should seek every potential alternative to bankruptcy in order to protect your personal property and assets. Moreover, a bankruptcy filing will probably make it harder to start a new business down the road. Not only will your assets be depleted, but you’ll also have the social stigma and financial baggage of a past bankruptcy.

However, even when your company is besieged by creditors, there may be non-bankruptcy options available. Restructuring and financial workouts can help satisfy your debtors without filing for bankruptcy. In many cases, just informing your creditors that you’re considering bankruptcy is usually enough incentive to bring them to the bargaining table. These bankruptcy prevention methods facilitate the creation of a compromise between your business and debtors. Whereas a bankruptcy would likely result in the creditor getting nothing, these negotiations result partial repayment, Workouts and debt restructuring are an effective way of satisfying your company’s debts without the hassle, cost, or embarrassment of a filing bankruptcy.

On the other hand, if your creditors are refusing to compromise and your debts can’t be resolved any other way, bankruptcy protection may be your only option. Depending on your business structure and financial situation, there are a number of options available for corporate bankruptcy. To determine the most appropriate chapter of bankruptcy for your company, you’ll want to consult with an experienced bankruptcy attorney. In fact, if you’re facing mounting debts, you may want to consult a bankruptcy lawyer before the situation becomes dire. He or she may be able to help get your company turned around with knowledgeable guidance and bankruptcy prevention advice.

While your mounting business debts and fed-up creditors may make you feel like filing for bankruptcy is your only option, there are viable alternatives to corporate bankruptcy. With the guidance and negotiations of a skilled bankruptcy attorney, you may be able to resolve your business debts in a way that satisfies your creditors without declaring bankruptcy!

Financial restructuring, workouts, and turnarounds are all strong options for overcoming your business’s debts. These involve working with your creditors to resolve your debts and enable the business to continue in operation. With options to renegotiate and reorganize debt, workouts can help your company regain liquidity without filing for bankruptcy. Turnarounds also utilize debt restructuring, but they additionally focus on organization restructuring, redesigning operational aspects of the business to resolve underlying issues.

You may be wondering why creditors would be willing to renegotiate debt. The simple truth is that bankruptcy protection generally means creditors take a major hit, seeing little-to-no repayment of the monies owed. Rather than being unenthusiastic about a workout, your creditors are likely eager to discuss debt restructuring because it’s the best option for having their debts fully satisfied!

When considering bankruptcy versus a workout, keep in mind that filing Chapter 7 bankruptcy or Chapter 11 bankruptcy is usually more invasive than a non-judicial solution. In addition to generally being less expensive, workouts and turnarounds are typically more private. With all of the financial disclosures, schedules of assets and liabilities, and in-depth reports, bankruptcy protection exposes the full gamut of your financial records to the United States Trustee, and ultimately, the public.

Of course, each situation is unique, so it’s important to consult an experienced bankruptcy lawyer for specific advice. They’ll be able to guide you through all the options available for your business’s specific needs and help you determine the appropriate course of action for your company.

In these stressful economic times, it’s important to know that your business is not alone: a bankruptcy attorney can help! Contact your local bankruptcy prevention specialist for more information.

With today’s struggling economy, many businesses are finding themselves swimming in unmanageable debt. When it’s impossible to make ends meet any longer, corporate bankruptcy is one solution. Businesses have several options available for bankruptcy filings, and depending on your debts, corporate structure, and other factors, your company may benefit differently from each type of bankruptcy filing. Listed below you’ll find a basic explanation of your business bankruptcy options, but be sure to consult with your bankruptcy lawyer for additional information and advice.

Chapter 7 Bankruptcy Liquidation

For companies with extreme financial difficulties and for sole proprietorships, Chapter 7 bankruptcy may offer the best resolution. In this type of bankruptcy, assets are sold off to satisfy all or part of your debts, and your company ceases operation.

Chapter 11 Bankruptcy Reorganization

Most commonly used by medium-sized and large corporations, Chapter 11 bankruptcy has been in the news a great deal recently with the highly publicized bankruptcies of GM and Chrysler. Also know as bankruptcy reorganization, Chapter 11 does not necessarily involve selling off assets. Rather, the company continues operation and goes through a structural and financial reorganization designed to help the company regain profitability. Chapter 11 can involve restructuring business debts with creditors, selling off assets to streamline the corporation, and other changes.

Chapter 12 Bankruptcy (for Family Farmers and Fishers)

This specialized form of bankruptcy is only available to struggling family farming and fishing operations.

Chapter 13 Wage-Earner Bankruptcy

Often used in personal bankruptcy filings, Chapter 13 bankruptcy can be used by sole proprietorship companies to repay debt over time. Allowing the business owner to retain ownership of assets, wage-earner bankruptcy creates a repayment schedule to satisfy creditors, usually over the course of three to five years.

For businesses suffering in today’s down economic market, corporate bankruptcy may be the only way out. To ensure you make the right decision for your struggling company and to assist in filing for bankruptcy, be sure to consult an expert bankruptcy attorney in your area.