What are Bankruptcy and Reorganization?
Bankruptcy (http://www.uscourts.gov/FederalCourts/Bankruptcy.aspx) is never a first choice for a struggling business, but in some cases it is the only way to get a handle on spiraling debts while keeping the business open for daily operations. Both Chapter 11 and Chapter 13 bankruptcy proceedings will allow businesses to retain property necessary for running the business while modifying or eliminating debt payments. However, Chapter 13 is restricted owners of sole proprietorships, while Chapter 11 bankruptcy is available to nearly any type of corporation, partnership or small business.
When bankruptcy (http://www.nolo.com/legal-encyclopedia/bankruptcy) appears to be the best course of action for your company, experienced legal representation is a must from the very beginning of the process. From helping you determine the best type of bankruptcy proceedings for your situation to helping you navigate the complex reorganization process, Marshack Hays is equipped to provide you with the legal assistance you need.
Are There Different Types of Bankruptcy?
There are many different types of bankruptcy (https://www.law.cornell.edu/wex/bankruptcy). The type of bankruptcy that you choose will depend upon your specific circumstances. To ensure you choose the best type of bankruptcy for you it is important that you speak with a bankruptcy attorney, like those at Marshack Hays LLP. We can help you choose from:
- Chapter 13 Bankruptcy
Chapter 13 bankruptcies typically involve an appointed trustee that oversees bankruptcy proceedings during the reorganization process. That process usually takes between three and five years to complete and businesses may continue normal operations during that time. In addition to restrictions on the type of businesses that can file Chapter 13, debt limitations are also in place for this type of reorganization. Those limits fluctuate somewhat, with different limits set for secured and unsecured debt.
- Chapter 11 Bankruptcy
In the event of a Chapter 11 bankruptcy, a business is allowed to continue operations while the proceedings continue. In most cases, a trustee is not appointed and the business serves as the “debtor in possession.” If circumstances arise where the bank finds sufficient cause to take over operations, a trustee may be appointed at that time. Chapter 11 reorganization plans involve restructuring so that the business can remain open by restructuring its financial matters.
- Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is also referred to as a “liquidation” bankruptcy. A trustee is generally appointed to administer the process of liquidating assets, cancelling some debts and paying off the rest. Chapter 7 bankruptcy proceedings typically take around six months to complete and must be handled by a lawyer.
Should I Declare Bankruptcy?
Bankruptcy and reorganization (http://www.hg.org/bankrpt.html) is a complex legal process that requires the assistance of an experienced professional. The bankruptcy attorneys at Marshack Hays have unmatched expertise representing debtors, creditors, creditor committees and bankruptcy trustees in all aspects of bankruptcy, reorganization and insolvency counseling. Bankruptcy is not necessarily the only way to resolve your financial issues. At Marshack Hays LLP, our team of attorneys can help you determine if bankruptcy is the best option for your specific set of circumstances.
When times are tough, Marshack Hays LLP is the firm of choice for companies and individuals facing their most challenging financial circumstances.