The word “bankruptcy” scares many people, consumers and business owners alike. If you own a business and a Chapter 11 restructuring of debts is no longer suitable to your situation, Chapter 7 may be exactly what you need to bail you out of trouble. A Chapter 7 business bankruptcy will liquidate your business to partially repay your creditors. If successful, you may walk away from the remaining debt. If you are considering filing for Chapter 7 bankruptcy, here are some of the questions you may have:
How will Chapter 7 bankruptcy benefit me?
A Chapter 7 bankruptcy is designed for those who can no longer continue their business operations because of high debt or operating expenses, as well as the lack of operating capital and significant assets. If your business has little or no potential to make money, offers a product or service that is easily replaceable, or has debts or significant accounts payable, making debt restructuring impossible, Chapter 7 bankruptcy may be for you. Do yourself a favor and contact an experienced attorney to discuss your options, as you may not be ready for Chapter 7 just yet.
What is the Chapter 7 bankruptcy process like?
First, you will file a petition with the bankruptcy court serving your area. This petition requires you to file documents detailing assets and liabilities, current income and expenditures, unexpired leases, executory contracts, and a financial statement. Additionally, you will have to provide the trustee with your latest tax return statement, or the transcripts of the most recent tax year and prior tax returns that span the time of the case, and possibly even further. Once you file for bankruptcy, an “automatic stay” will take effect immediately, stopping creditors from pursuing the debt until further action is taken by actors of the bankruptcy court. From here, a trustee will hold a meeting of creditors, where you will answer the trustee’s and creditor’s questions regarding your financial affairs and property under oath. The trustee will then share their assessment with the court. If successful, your business will be issued a Chapter 7 discharge, allowing the release of your unsecured debts.
Contact our experienced New Jersey firm
The Radol Law Firm has over 30 years of experience guiding businesses through the process of bankruptcy. Our firm carefully counsels business clients to ensure that Chapter 7 or Chapter 11 bankruptcy is truly the best option. Depending on your circumstances, we may be able to help you avoid business bankruptcy by creating a debt restructuring strategy.
Before taking any sort of legal action, it is important to discuss your legal matter with an experienced attorney. Contact The Radol Law Firm to discuss any divorce and family law matters you may be faced with.