What's important to know about Chapter 7 bankruptcy?See More Videos
Rockland County Chapter 7 Business Bankruptcy Attorney
Representing business owners who need to file for Chapter 7
Struggling business owners facing overwhelming debts may need to consider bankruptcy. There are options available to them that depend on the financial situation of the company. Chapter 7 is the liquidation of a business to pay debts. Chapter 11 can save a business through the development of a repayment plan. Choosing between Chapter 7 and Chapter 11 bankruptcy deserves the attention of an experienced attorney. The Law Offices of Allen A. Kolber, Esq. has over 25 years of experience helping business owners through the process of Chapter 7 bankruptcy. If you are a business owner that needs quality legal support from an experienced attorney, contact The Law Offices of Allen A. Kolber, Esq. for a consultation.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is also known as liquidation bankruptcy. In Chapter 7 bankruptcy, your business will be liquidated to pay as much of your debt as possible. Even personally signed and guaranteed business debt can be addressed. When successful, you can walk away from the remaining unsecured debts. Unfortunately, Chapter 7 bankruptcy usually ends with a business closing.
Is Chapter 7 the best option?
It is important to consult with an attorney when considering bankruptcy. If the company is worth more than its outstanding debts, Chapter 11 may be the right choice, keeping the business running and staff employed through the execution of a restructuring plan. Chapter 7 bankruptcy may be your best option if your business:
- Has little or no potential for profit
- Debts are worth more than the business’s assets
- Offers a redundant product or service
- Debt restructuring is impossible because of debts and significant accounts payable
Starting the process
Chapter 7 bankruptcy starts with filing a petition with the bankruptcy court. With that petition, aside from a financial statement, you must provide documents detailing:
- Current income and expenditures
- Executory contracts and leases
In addition, you will have to provide the bankruptcy trustee with the latest tax return or transcripts for the most recent tax year and prior years that span the time of the case, possibly further. Though it seems straightforward, the process is time-consuming and document-heavy, deserving the attention of an experienced bankruptcy attorney.
The Automatic Stay
Immediately after a successful filing of Chapter 7, an automatic stay goes into effect. This stay will stop creditors from being allowed to pursue the debt. They will not be allowed to contact you and any pursuit must be through the trustee and the bankruptcy court.
The Meeting of Creditors
After a few weeks, the meeting of creditors takes place. This meeting consists of the bankruptcy trustee, debtor and his or her counsel, and any creditors who wish to attend. During the meeting, the creditors and trustee may ask questions to gain an understanding of the business’s functionality, financial affairs, and property. The trustee will assess the situation and decide if Chapter 7 is the right choice.
Chapter 7 discharge
Simply put, if the Chapter 7 process is successful, the business will be liquidated, assets will be sold to pay creditors, freeing the debtor of the remaining unsecured debt, called a discharge. It is important to know that secured debts are not dischargeable and the debtor will still be responsible for that.
Contact The Law Offices of Allen A. Kolber, Esq.
It is important to explore the alternatives to bankruptcy. Our firm understands that you may wish to save your business and keep your staff employed. If that option is off the table, our firm will guide you through Chapter 7 bankruptcy, protecting your rights and mitigating the impact to your future. If you need quality legal support from an effective law firm, contact The Law Offices of Allen A. Kolber, Esq. for a consultation.