Owning and operating a business comes with many challenges. Chief among these is limiting the business’s debt and doing all that you can to collect a regular profit. For far too many business owners, this goal has become impossible. Mounting debts and falling profits can make it seem as though the company will never be able to recover and succeed.
If this sounds like your business’s current situation, a declaration of bankruptcy may be your best option. The experienced bankruptcy attorneys from Gillman, Bruton & Capone understand how difficult this decision can be, and we explore all options available, including discussing bankruptcy. If you do decide on bankruptcy, it can bring immediate relief from the collection efforts of creditors and an eventual discharge of many forms of company debt. It is important to choose the bankruptcy plan that is best for your company. Contacting our Edison business bankruptcy lawyer is the first step towards helping your business resolve its debts.
The purpose of any bankruptcy petition is to obtain both immediate and long-term debt relief. With that in mind, there are two main options for debt relief that a business may pursue.
Chapter 7 business bankruptcy is available to all businesses and can bring debt relief in exchange for the liquidation of most of the company’s assets. This will satisfy the creditor’s claims under the law. The drawback to Chapter 7 is that it will result in the dissolution of the business. For this reason, you should view it only as a last resort.
Another option for businesses is to seek out a Chapter 11 bankruptcy. In Chapter 11 business bankruptcy, the court still orders the discharge of most debts but it will also oversee the reorganization of the company. This plan of reorganization may require the business to liquidate some assets, close locations, and/or even lay off employees. The main benefit is that the company gets to stay in business for the future, free from burdensome debts. There is also a streamlined version of Chapter 11 bankruptcy for small businesses known as a Subchapter V Small Business Bankruptcy which is easier to manage as compared to the plan that larger business must go through. The Subchapter V option is available to both businesses and business owners who are facing debt issues.
Our Edison business bankruptcy attorney can assist New Jersey business owners in deciding which path – Chapter 7 or Chapter 11 – is going to put them in a better position.
The goal of a business’s bankruptcy petition is to obtain relief from debt, which occurs upon the successful completion of a bankruptcy plan. However, many business owners do not realize that they can receive an immediate benefit as soon as they submit a petition to open a case to a United States Bankruptcy Court.
This benefit comes in the form of an “automatic stay” on all collection efforts. An “automatic stay” means that creditors can no longer take aggressive action to collect on the debt for as long as the case remains in bankruptcy court. In addition, all current lawsuits and other legal action regarding the business’s finances, also, freeze in place while the bankruptcy case moves forward. Finally, all creditors that are thinking about placing an account into collections or filing a lawsuit must now wait for the case to move through the court. Our Edison business bankruptcy attorney is prepared to guide a complete bankruptcy petition through court and secure an immediate stay on all collection efforts.
Businesses can fall into significant debt for a variety of reasons, whether it is falling behind on vendor payments, being in arrears on a mortgage, or experiencing a reduction in income. Regardless of the reasons for falling into debt, a declaration of bankruptcy may be the answer. Bankruptcy can allow you to obtain immediate relief from collection efforts and a discharge of business debt upon completion of the program.
Our Edison business bankruptcy lawyer can provide more information about what is required to begin addressing your debts. We aim to analyze a business’s finances, determine if bankruptcy is the right choice, recommend a bankruptcy plan, take all necessary steps to submit petitions to the court, and assist you in completing your debt relief program. Reach out to us now to learn more.