Consumer Bankruptcy Attorney

Bankruptcy can be a complicated and intimidating process. Many questions should be answered before you move forward with this important decision. With Michael J. Rose, P.C., you get an experienced and dedicated bankruptcy lawyer who will help you through your bankruptcy situation. We help clients with bankruptcy problems, including Chapter 7 bankruptcy, Chapter 13 bankruptcy, and bankruptcy litigation and appeals.

Contact us to schedule a free initial consultation. Our practice is devoted exclusively to bankruptcy matters in order to provide the high quality representation you deserve.

Business Bankruptcy - An Overview

The primary purpose of bankruptcy is to deal with debts that cannot be paid in full without some sort of court-monitored plan. The debtor may wish to close its business and liquidate its assets to pay its debts or the debtor may wish to reorganize its debt and enter into a repayment plan while continuing to operate its business. In most cases, a business debtor will voluntarily initiate bankruptcy proceedings by filing a petition. In rare cases, a creditor will initiate a bankruptcy proceeding so as to secure some form of payment or a plan that has judicial approval. This is referred to as involuntary bankruptcy. Generally, federal law (Title 11 of the United States Code and the Federal Rules of Bankruptcy Procedure) governs bankruptcy proceedings, which are filed in United States Bankruptcy Courts. If your business is facing financial difficulty and you are considering filing for bankruptcy, talk to a lawyer. A bankruptcy attorney can evaluate your situation and guide you through the bankruptcy process.

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Liquidation Under Chapter 7

In a Chapter 7 bankruptcy, the debtor's assets are liquidated (sold) and the proceeds are distributed to creditors. Partnerships, sole proprietorships and corporations, in addition to individuals, are eligible to file under Chapter 7. However, unlike individuals, these business entities are not eligible to receive a discharge. 11 U.S.C. §727(a)(1). Chapter 7 business liquidations are conducted in significantly the same manner as Chapter 7 consumer bankruptcies — many of the business's assets are sold and the proceeds are divided among the company's creditors. Partnerships or corporations that wish to keep doing business may decide that Chapter 7 is not the best option because after liquidation and distribution, the business ceases to exist. If you run a business that is facing financial difficulty and are considering bankruptcy, talk to an attorney about your options.

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Chapter 11 Bankruptcy

Chapter 11 allows for the reorganization of debts. Chapter 11 also allows a business to continue to carry on routine operations in the ordinary course of business while going through the reorganization. Corporations, partnerships and sole proprietorships are all eligible for Chapter 11 reorganization. 11 U.S.C. §109. If a corporation files under Chapter 11, the personal assets of the stockholders, beyond the value of the stock they own, are not at risk. Because a sole proprietorship does not have a separate legal identity from its owner, both the personal and business assets of a sole proprietor are involved in a Chapter 11 case. A partnership is separate from its partners, but the partners' personal assets may be used to pay creditors in a Chapter 11 case in some instances. An experienced bankruptcy attorney can help you determine whether Chapter 11 is a good option for your business.

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Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy, there is a reorganization of the company's debt. Most businesses that wish to remain in business select reorganization, rather than liquidation. Chapter 13 generally applies to individual consumers with smaller debts. Corporations and partnerships cannot file under Chapter 13, but self-employed individuals and individuals who own unincorporated businesses are eligible for Chapter 13. The debtor must have less than $307,675 in unsecured debt and $922,975 in secured debt, however, in order to be eligible for Chapter 13. 11 U.S.C. §109(e). These amounts are adjusted periodically. If you own an unincorporated business that is having financial difficulty, Chapter 13 bankruptcy may be an option. An experienced bankruptcy lawyer can explain the bankruptcy process to you.

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Issues to Consider Before Filing Bankruptcy

Businesses that are struggling to pay debt or that are facing other financial difficulties may wonder how to fix their financial problems. There are several bankruptcy and non-bankruptcy options that a stressed business may consider using to help it out of a tough spot. An experienced attorney can explain these options to you and help you make a decision that works for your business.

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