In difficult economic times, bankruptcy filings increase. According to the Administrative Office of the US Courts, over 1.1 million people filed for bankruptcy in 2008, up 31% from 2007. Contact a knowledgeable and experienced attorney who can help guide you through the complicated maze of overcrowded bankruptcy courts.
Experienced Chapter 7 and Chapter 13 Bankruptcy Attorneys
Legal Solutions When Debt Becomes Overwhelming
When personal and family debt become overwhelming, bankruptcy protection can provide timely, long-term relief. Chapter 7 and Chapter 13 provide for the reduction of debt through the sale of unsecured/non-exempt assets or designation of a repayment plan to be approved through the bankruptcy courts.
At the Lindenhurst, New York, law firm of Phillips, Weiner, Artura & Cox, we have provided bankruptcy legal services to the residents of Long Island for 40 years, and can meet with you one-on-one and for a free initial consultation to discuss your concerns and determine if either bankruptcy plan will serve your needs. Contact us at 631-226-2100.
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Do you have questions regarding Chapter 7 or Chapter 13 bankruptcy protection? At the Lindenhurst, New York, law firm of Phillips, Weiner, Artura & Cox we have provided bankruptcy legal services since 1969. For experienced help in reducing crushing debt, contact us at 631-226-2100.
You do not have to tolerate creditor harassment. Through Chapter 7 or Chapter 13 bankruptcy protection you can immediately cease contact by creditors. For more information, call our experienced lawyers at 631-226-2100.
Commercial Bankruptcy
Like a consumer, a business sometimes finds itself in the uncomfortable position of being unable to pay its debts. One solution is to file for bankruptcy, a legal process in federal bankruptcy court that releases the business from the obligation to pay all or some of its debts. The experienced lawyers at Phillips, Weiner, Artura & Cox in Lindenhurst, New York advise business owners about whether bankruptcy is right for them.
Bankruptcy Choices for Small Businesses
Businesses must choose among alternative types of bankruptcies, each of which corresponds to a different chapter of the federal Bankruptcy Code. Businesses usually choose either Chapter 7 or Chapter 11, or occasionally Chapter 13. Sometimes businesses can be involuntary drawn into bankruptcy by their creditors, who face stiff financial penalties if they initiate an involuntary bankruptcy for invalid reasons.
Chapter 7
Chapter 7 bankruptcies are called "liquidation bankruptcies." Chapter 7 is usually employed by consumer debtors, but can also be used by businesses that want to liquidate their assets to be relieved of debt. A Chapter 7 bankruptcy is commenced when the business files a petition with the bankruptcy court. The court then orders an automatic stay of all collection action against the business and its property. A court-appointed trustee manages the details of the bankruptcy, selling business assets to satisfy business debt, to the extent possible. At the conclusion of the proceeding, remaining debts of the business are not discharged as with an individual debtor, but generally the business ceases to exist because its assets are gone and it is no longer a profitable concern.
Chapter 11
In Chapter 11 bankruptcies, which are usually filed by businesses and rarely by individuals, the commercial debtor is usually allowed to stay in business throughout the bankruptcy proceedings. A business debtor may only operate independently in its ordinary course; transactions outside the ordinary course of business require court approval.
A Chapter 11 proceeding, like one under Chapter 7, is initiated by filing a petition, but a trustee is not automatically appointed. Although the bankruptcy judge may decide to appoint a trustee in a Chapter 11 case, it is the exception rather than the rule. As in Chapter 7, the filing of the bankruptcy petition stops creditors from attempting to collect their debts.
The debtor has time to file a proposed plan of reorganization. The plan of reorganization sets forth in detail how the debtor intends to conduct its business, while continuing to make payments to its creditors. In some situations, creditors may instead or also propose plans of reorganization. Creditors are divided into classes with varying rights depending upon the types of debt they hold. The approval process involves negotiation and input from creditors. Ultimately, a plan must be approved by the court. In some cases, the court approves the plan even though some of the creditors did not. If no plan is approved, however, the bankruptcy is often converted to a Chapter 7 liquidation or may be dismissed.
The choice between Chapter 7 and Chapter 11 is not necessarily permanent; once proceedings have begun, a case may be converted to a different chapter, under certain circumstances.
Conclusion
Bankruptcy may not be the best option for every business, but sometimes it is the best choice a business owner can make. Alternatives to bankruptcy include working informally with creditors toward a repayment plan or assigning assets for the benefit of creditors. A lawyer experienced in bankruptcy law, like those at Phillips, Weiner, Artura & Cox in Lindenhurst, New York, can help a business decide whether bankruptcy best meets its needs.
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