Folsom Bankruptcy Lawyer for Businesses
If you or someone you know is considering filing a business bankruptcy in the Folsom area, we can help. We have extensive experience handling business bankruptcy claims like yours. Don’t give up hope before you talk to a skilled, experienced, and knowledgeable bankruptcy lawyer.
To learn more about your case in a free, confidential consultation with one of our Folsom business bankruptcy attorneys, call The Bankruptcy Group today at 1-800-920-5351.
Can I File for Business Bankruptcy in Folsom?
Many people have heard about consumer bankruptcy due to its effectiveness and benefits. Some business owners may wonder whether they can obtain the benefits consumers can get from a bankruptcy process. The good news is business owners can file for bankruptcy through a business bankruptcy.
This type of bankruptcy is not one-size-fits-all. Instead, different bankruptcy options are available depending on how the business is structured. For instance, if you run a small business and you are the sole proprietor, you may be able to file for a Chapters 7, 11, or 13. On the other hand, if you have a corporation, then you would be able to file for a Chapter 7 or Chapter 11.
Filing for Chapter 7, 11, or 13 Business Bankruptcy
As stated before, you may be able to file a business bankruptcy under Chapters 7, 11, or 13, depending on how your business is structured. We present each option separately so you can have a better understanding of what they entail and how you can file for each of them.
Chapter 7 bankruptcy, also known as direct or liquidation bankruptcy, is a process through which debtors can eliminate most or all their unsecured debt. Part of the requirements to qualify for a Chapter 7 bankruptcy is to meet the requirements of a means test. This test will evaluate your current monthly income to determine whether such income is more or less than your state’s median income. The higher your income, the lower your chances of meeting the means test. However, in a business bankruptcy under Chapter 7, if you have more business debt than personal debt (if you are a sole proprietor), you don’t have to go through the means test.
If you qualify for Chapter 7, the court will appoint a trustee who will be in charge of selling all non-exempted property and distributing the proceeds among your creditors. Once you have completed the process successfully, your unsecured debt will be discharged, giving you the chance of starting anew. The results of Chapter 7 for partnerships and corporations may not yield the same results. For instance, these two types of businesses will not receive a discharge after their Chapter 7 process. A skilled, knowledgeable bankruptcy lawyer can help you through your bankruptcy process.
Chapter 11 is also known as a reorganization bankruptcy. Chapter 11 consists of a plan to reorganize and keep the business running under the supervision of a court-appointed trustee or administrator. Chapter 11 requires the debtor to outline a plan detailing how they will address their outstanding debt. The debtor will present the plan to their creditors, who will determine whether such a plan is feasible and attainable.
Once agreed upon, the court will revise the details on the plan and approve it once they have learned the plan is fair and equitable. The nuances of the Chapter 11 process can be extremely complex, and it is recommended to have legal assistance by your side at all times. Our skilled Chapter 11 attorneys can guide you through your reorganization process.
Chapter 13, much like Chapter 7, is a consumer bankruptcy that businesses can take advantage of. Through this bankruptcy – also known as a repayment plan bankruptcy – the debtor outlines a repayment plan that can take up to five years to complete. From the moment the plan is approved, the debtor must comply with all the agreed-upon terms to complete their bankruptcy requirements.
These are simplified versions of what bankruptcy entails for debtors. It is always in your best interest to consult an experienced bankruptcy attorney who is familiar with the intricacies of bankruptcy laws.
Are There Any Benefits to a Business Bankruptcy?
Yes, a business bankruptcy can offer a number of potential benefits business owners who decide to file under one of the aforementioned chapters. For instance, one of the significant benefits debtors can obtain by filing for bankruptcy is the protection granted by the “automatic stay.” This feature prevents your creditors from exercising collection actions against you while the bankruptcy process is underway. Additionally, it can help you defend your property against foreclosure or sale of assets.
Furthermore, a debtor can borrow money as a debtor in possession (DIP). DIP financing can be available under Chapter 11 and can help the debtor get the liquidity needed to meet their financial obligations. These and other benefits may be available to those who file for business bankruptcy. Our Folsom bankruptcy lawyers can help you through the entire process.
Business Bankruptcy Lawyers Serving Folsom, California
Don’t let debt take over your small business, LLC, or corporation. Let our experience and knowledge work for you during this difficult time. If you or someone you know is considering a business bankruptcy, we may be able to help. To learn more about the specific circumstances of your case and how we can help you, call the Folsom bankruptcy attorneys at The Bankruptcy Group today at 1-800-920-5351.