If you are a business owner and are struggling to pay your debts, you may be considering filing for bankruptcy. Please continue reading and reach out to our experienced New Jersey bankruptcy attorney to learn more about business bankruptcy and how our firm can help you through the process ahead. Here are some of the questions you may have:
What Is Chapter 7 Business Bankruptcy?
If it turns out that your business is no longer worth more than the debt it owes, and there is no way you can come up with the money to pay off your debts, you may choose to file for Chapter 7 business bankruptcy, also known as the liquidation bankruptcy. Filing will pay off all unsecured debts. To file for Chapter 7, you and your attorney will file a petition with the Bankruptcy Court. This petition will contain your business’s current income, assets, liabilities, contracts, leases, expenditures, and more. As long as you can prove that your business’s debts are worth more than its assets, that your business has little or no potential for profit, or that you can no longer restructure your debts successfully, you should be granted Chapter 7, clearing you of all unsecured debts, however, your business will most likely close.
What Is Chapter 11 Business Bankruptcy?
Chapter 11 bankruptcy is the perfect tool for businesses that are capable of getting back on track and turning things around. Essentially, a Chapter 11 bankruptcy will allow your business to remain open and continue paying employees, in exchange for you making a 5-year payment plan–this is essentially restructuring your debt. When you make your plan, creditors and banks are prohibited from shutting your business down. As long as everything goes as planned, after 5 years, your business will become a profitable entity once again.
What Is the Automatic Stay?
When you successfully file for bankruptcy, the Bankruptcy Court will initiate an “Automatic Stay.” Once this happens, creditors may not call you, send you letters, repossess your property, or otherwise collect in any way. Automatic Stays will do the following:
They go into effect immediately
They prevent collectors from pursuing debts
They prevent collectors and banks from harassing you
You can have peace of mind knowing your business is safe until you get it back on track again
Contact Our Experienced New Jersey Firm
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. That is why we are confident we have what it takes to provide you with the effective legal counsel you need. If you need experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.