There are many bankruptcy chapters that individual consumers, businesses, charities and other legal entities can use to get rid of their debts. This legal provision has been provided under the federal bankruptcy act, but state law also has some provisions that guide the entire process. If you have been weighed down by debt, you can use bankruptcy to get a fresh start. The key to success, however, lies in hiring a chapter 11 Oakland lawyer.
Chapter 11 is available to business and corporate debtors. Any legal entity that consumes debt can apply for legal protections under this option. However, the business must have a regular source of income, which is predictable and considerable. If not, liquidation may be recommended by the trustee.
While the default type of bankruptcy calls for liquidation of assets owned by the firm to offset their debts, this option provides for reorganization of debts. The debtor is declared bankrupt, and gets all bankruptcy protections. In return, they agree to make monthly payments to the trustee, who distributes the payments to all the creditors. This goes on throughout the bankruptcy period, after which all unpaid debts are written off.
The main advantage of this chapter is that it makes it possible for business owners to retain ownership over their business assets. In business, liquidation translates to shutting down of business operations. It is also much more confidential than liquidation.
After filing the necessary paperwork in court, a bankruptcy trustee will be appointed. This is the person who will be in charge of the entire bankruptcy process. They will carry out due diligence on the financial position of the debtor to confirm that they meet all the minimum requirements for this option. If the debtor has a lot of valuable assets and an unreliable income, the trustee may recommend liquidation as opposed to restructuring of debts.
There are some business debts that cannot be written off no matter what. Taxes, for instance, must be paid together with penalties, fines and interest on overdue taxes. Therefore, you should keep this in mind when filing for bankruptcy. After all, a large fraction of your debt may comprise taxes, fines and penalties as well as interest on the same.
Debt restructuring is a much better option than liquidation, especially when it comes to business debts. In the case of liquidation, you will have to shut down your business as all the plant, machinery, equipment and inventory will be liquidated without exceptions. With debt restructuring, you only need to use business income to pay a fixed monthly payment throughout the bankruptcy period.
Bankruptcy is only an option of last resort, so you should never rush to seek bankruptcy protections. This is because there are many downsides of becoming bankrupt. For one, your business will not be able to access credit facilities from mainstream lenders throughout the bankruptcy period. Secondly, your bankruptcy status will be made public, and this may affect your business prospects as most investors and suppliers do not want to work with bankrupt individuals. Therefore, you should consider other options before declaring bankruptcy.
Chapter 11 is available to business and corporate debtors. Any legal entity that consumes debt can apply for legal protections under this option. However, the business must have a regular source of income, which is predictable and considerable. If not, liquidation may be recommended by the trustee.
While the default type of bankruptcy calls for liquidation of assets owned by the firm to offset their debts, this option provides for reorganization of debts. The debtor is declared bankrupt, and gets all bankruptcy protections. In return, they agree to make monthly payments to the trustee, who distributes the payments to all the creditors. This goes on throughout the bankruptcy period, after which all unpaid debts are written off.
The main advantage of this chapter is that it makes it possible for business owners to retain ownership over their business assets. In business, liquidation translates to shutting down of business operations. It is also much more confidential than liquidation.
After filing the necessary paperwork in court, a bankruptcy trustee will be appointed. This is the person who will be in charge of the entire bankruptcy process. They will carry out due diligence on the financial position of the debtor to confirm that they meet all the minimum requirements for this option. If the debtor has a lot of valuable assets and an unreliable income, the trustee may recommend liquidation as opposed to restructuring of debts.
There are some business debts that cannot be written off no matter what. Taxes, for instance, must be paid together with penalties, fines and interest on overdue taxes. Therefore, you should keep this in mind when filing for bankruptcy. After all, a large fraction of your debt may comprise taxes, fines and penalties as well as interest on the same.
Debt restructuring is a much better option than liquidation, especially when it comes to business debts. In the case of liquidation, you will have to shut down your business as all the plant, machinery, equipment and inventory will be liquidated without exceptions. With debt restructuring, you only need to use business income to pay a fixed monthly payment throughout the bankruptcy period.
Bankruptcy is only an option of last resort, so you should never rush to seek bankruptcy protections. This is because there are many downsides of becoming bankrupt. For one, your business will not be able to access credit facilities from mainstream lenders throughout the bankruptcy period. Secondly, your bankruptcy status will be made public, and this may affect your business prospects as most investors and suppliers do not want to work with bankrupt individuals. Therefore, you should consider other options before declaring bankruptcy.
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