$750 Million +
of Debt Discharged and Eliminated
of Debt Discharged and Eliminated
Bankruptcy Clients Represented
Successful Debt Discharge Rate
Whether or not to seek bankruptcy protection for your business can be a difficult and complicated decision based on a number of factors including scope of assets, amount of debt, cash flow and future business prospects. Only a qualified attorney can fully evaluate and explain these issues and provide legal advice. McFarlin LLP business bankruptcy attorneys routinely handle these types of matters and can help you make the right decision.
Only corporations, limited liability companies, and partnerships can be considered separate legal entities and file for insolvency in their own right without involving the personal credit of the owner(s). These businesses can file Chapter 7 or Chapter 11 Bankruptcy. Sole Proprietorships on the other hand, are extensions of the owner and can’t file bankruptcy separately from the owner.
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Although both individuals and corporations can file chapter 7, business bankruptcy cases often take a much different path than individual cases. The purpose of a business chapter 7 is typically to stop creditor attacks and orchestrate the orderly distribution of assets (if any) to pay business debts. Although a business debtor does not get a discharge in chapter 7 the way an individual does, a corporation can still derive great benefit from the protection chapter 7 offers.
Chapter 11 Bankruptcy is designed to preserve ongoing business operations while formulating a repayment plan for business creditors. Bankruptcy reorganization in Chapter 11 requires a significant amount of time on the part of the owners, and managers to comply with the requirements of the bankruptcy system. Interacting with counsel, and negotiating with creditors is time consuming. Chapter 11 Bankruptcy is usually expensive as well and requires a significant commitment of resources.
Corporations can not file Chapter 13, it is only for individuals. However, for self-employed individuals (even those with a corporation), chapter 13 can be a worthwhile option to consider. It can best be summarized as a court supervised repayment plan for the benefit of creditors. A chapter 13 debtor must devote all “disposable income” to his or her chapter 13 plan typically over 60 months. If 60 months of disposable income is not sufficient to repay creditors in full, the remaining balance due to creditors can be discharged upon completion of the plan.
McFarlin LLP will take the time to understand your business and the challenges you may be facing. We explain all aspects and implications of business bankruptcy in language you can comprehend. Although our clients often ask us to make recommendations as to timing and type of bankruptcy, the ultimate decision is always yours to make. Business Bankruptcy is an often overlooked way for a business and its owners to survive challenging economic times and protect themselves from aggressive demanding creditors.
For business owners, it’s important to understand the differences and similarities between personal and business insolvency. Corporations, limited liability companies, and partnerships can be considered separate legal entities and file in their own right without involving the personal credit of the owner(s) by filing either Chapter 7 or Chapter 11.
These two chapters provide different means of eliminating debt, but they each have their strengths and weaknesses. Chapter 7 involves liquidating property and selling it in order to pay off debt. It also means that your business must cease operations immediately, unless it is allowed to continue by a Chapter 7 Trustee. Chapter 11 typically allows you to remain in control of your company, but under the jurisdiction and oversight of the court as a debtor in possession. Your business will be restructured and continue to operate, but a specific amount of profits will be paid to creditors to eventually eliminate debt.
Determining which Chapter is right for your company can help you avoid unnecessary damage and give your company the best chance at successful recovery.
Sole Proprietorships, on the other hand, are extensions of the owner and can’t file bankruptcy separately from the owner. Balancing both personal and company finances during the process can be very tricky and will require proper insight to avoid costly mistakes.
For reasonable fees, we will create a winning strategy for a positive outcome. Email us or call us today for a free confidential and straightforward conversation with one of our knowledgeable attorneys at (888) 728-0044.
At McFarlin LLP we understand what you’re facing. We’re not here to impress you with our financial knowledge or wow you with legal jargon, our goal is simple: to help. Our experienced lawyers can offer up to date legal advice and personalized attention. We will create a winning strategy for a positive outcome at a reasonable cost. Call us today for a free confidential and straightforward conversation with one of our knowledgeable business bankruptcy attorneys at (888) 728 0044, or email us.
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