Archive for October, 2009
Corporate Bankruptcy Is NOT the Only Solution for Your Struggling Business: Explore Bankruptcy Alternatives to Satisfy Your Corporate Debts
October 7th, 2009 | 
Author: The first question most business owners ask about workouts and restructuring is why will my creditors want to renegotiate debt? The simple answer is that bankruptcy often means creditors see little-to-no repayment of their debts. That means, in most cases, your creditors actually want to help your company avoid bankruptcy. Instead of being unenthusiastic about a workout, creditors will likely be eager to pursue debt restructuring. They know it’s the best option for having part or all of their debt repaid, and they’ll work with you to develop a successful financial workout.
When considering filing for bankruptcy, remember that bankruptcy is almost always more invasive than a workout. On top of being less expensive, non-judicial solutions like workouts and turnarounds have the option of being more private. Bankruptcy protection involves and astounding number of financial disclosures, schedules of assets and liabilities, and in-depth reports, exposing all your financial records to the courts and ultimately, the public.
Keep in mind that every corporate bankruptcy situation is different, so you should consult an experienced bankruptcy lawyer for advice. He or she can guide you through the options available for your specific business and help you decide on appropriate course of action. In these chaotic economic times, remember that your business is not alone: a bankruptcy attorney can help! Call your local bankruptcy prevention specialist today.
Resolving Your Business Debt: Options in Corporate Bankruptcy
Chapter 7—Bankruptcy Liquidation
Chapter 7 bankruptcy results in the closure and liquidation of your company. For corporations with insurmountable financial debts and for sole proprietorships, Chapter 7 bankruptcy filing can be the best resolution. The company’s assets are sold off to satisfy your creditors, and the business ceases operation.
Chapter 11—Bankruptcy Reorganization
Chapter 11 bankruptcy is most frequently utilized by large and medium-sized corporations. In the headlines recently with the publicity surrounding the Chrysler and GM bankruptcies, this type of bankruptcy focuses on the reorganization of the business. When a company files for Chapter 11 bankruptcy, the business continues operation while undergoing financial and structural reorganization. This type of bankruptcy can, but does not necessarily, involve selling off assets.
Chapter 12—Bankruptcy for Family Farmers and Fishers
Available only for family farming and fishing operations, Chapter 12 bankruptcy is a specialized option designed to assist these agricultural businesses.
Chapter 13—Wage-Earner Bankruptcy
Chapter 13 bankruptcy is actually a type of personal bankruptcy. Also available to sole proprietorship companies, Chapter 13 enables an individual to repay debt over a period of 3 to 5 years. Rather than liquefying assets to satisfy creditors, this type of bankruptcy allows the business owner to maintain ownership of assets. Instead, it creates a repayment schedule to pay debts over time, usually from an individual’s salary (thus wage-earner bankruptcy).
If your company is suffering in today’s down market, corporate bankruptcy is only one of the options for debt resolution. To help you make the right decision for your, be sure to consult an experienced bankruptcy lawyer.
Corporate Bankruptcy: When Should a Business File for Bankruptcy?
Corporate Bankruptcy: When Should a Business File for Bankruptcy?
When your company is facing money problems, it can be hard to know when to file for bankruptcy. Consulting with an experienced bankruptcy lawyer can help you determine if your business must file for Chapter 11 or Chapter 7 bankruptcy.
In the current economic climate, more and more businesses are suffering from increased financial stress. When your debts are piling up, it can be hard to decide if or when to file for bankruptcy protection. Here is a brief overview of the issues surrounding bankruptcy, but you should always consult with a professional bankruptcy attorney prior to making any decisions regarding a bankruptcy filing.
The simple answer is, try every other solution before filing for bankruptcy. Even if your company is overwhelmed by debts and creditors, there may be non-judicial resolutions available. Financial restructuring and workouts can help you satisfy your debtors without having to file for bankruptcy. In fact, simply letting your creditors know you’re considering bankruptcy may be incentive enough for them to come to the bargaining table! These types of bankruptcy prevention strategies create a compromise solution between your company your business debtors. The end result is a negotiated partial repayment whereas a bankruptcy would likely result in the creditor getting nothing. Workouts and debt restructuring are a way of resolving your debts without the hassle, cost, or embarrassment of filing bankruptcy.
For small business owners, a business bankruptcy can also impact your personal finances. In partnerships and sole proprietorships, you can be held personally liable for your company’s debts, and your assets can be used to satisfy your creditors. Obviously, in these cases, you’ll want to seek every possible alternative to bankruptcy in order to safeguard your personal property. Additionally, filing for bankruptcy will likely make it harder to start a new business in the future. Not only will you have depleted assets, but the social and financial stigma of bankruptcy may also be a problem for you.
However, if your debt problems can’t be resolved any other way, bankruptcy protection may be your only option. Depending on your company’s structure, there are a number of different options available for corporate bankruptcy. In order to determine the most appropriate type of bankruptcy for your business, you’ll need to consult an experienced bankruptcy attorney. In fact, if your debts are mounting, you may want to speak with a bankruptcy lawyer before the situation becomes truly dire. He or she may be able to help get your company turned around from the brink of disaster with knowledgeable advice and guidance.
If you’re considering business bankruptcy, take control of your circumstances by contacting a bankruptcy professional today!
Posted in Business Bankruptcy Alternatives | 
Tags: albany ny, bankruptcy alternatives, bankruptcy lawyer, chapter 11, chapter 7, david ganje | 
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