Business Bankruptcy Attorneys
Depending on who's filing, business bankruptcy attorneys can be friends or foes. Lawyers play important roles on both sides of Chapter 11 cases; and debtor and creditor are equally entitled to expert legal representation. Each party comes to the table with specific goals and objectives; but it's up to the lawyers to persuade the judge and plead the client's case. In a Chapter 11 petition, the debtor attorney's main goal is to protect debtor assets; while the creditors' lawyers seek to get as many secured and unsecured claims paid as possible. Chapter 11, or business reorganization, requires the debtor in possession to submit to the court a viable plan to restructure company management for greater profitability. But the plan has to be approved by creditors, who have the right to reject proposed restructuring and engage in adversarial proceedings. Attorneys are there to present, contest and advocate opposing views of debtors and creditors.
The bankruptcy courtroom is much like a boxing ring: the debtor is in one corner and the creditor, or creditor committee, is in the other. The stakes may be high. After all, the debtor's business is on the line and creditors want to be compensated. Like a seasoned trainer who knows all the tricks of professional boxing, attorneys are on hand to provide expert blow-by-blow instruction on how to win. Good business bankruptcy lawyers plead the debtor's case, citing heavyweight reasons why the client should be granted the right to continue operating a financially-troubled company. Part of the burden of proving the debtor's ability to pay creditors under reorganized management also rests firmly on the attorney's shoulders. Presenting the debtor's case before trustees, creditor committees, and the judge requires mental dexterity and a determination to win. Business bankruptcy lawyers hired by creditors may be equally formidable in contending for client's rights to receive payment and restitution for unpaid debts. A creditor's lawyer doesn't want to have a claim dismissed or thrown out because of a technicality. Creditor lawyers are prepared to go to the tenth round to ensure a knockout victory and get debts discharged. As debtor and creditor trade blows, the bankruptcy court judge is there to referee the proceedings, ensuring that neither contender throws a punch below the belt.
Debtors and creditors should choose business bankruptcy attorneys who are knowledgeable about corporate law, specialize in Chapter 11 filings, and have a good track record of successful discharges and satisfied clients. Attorneys help debtors in possession file Chapter 11 reorganization plans with the local court. A Chapter 13 proceeding requires a trustee to perform an accurate accounting of debtor assets, examine and determine the validity of creditor claims, and file reports; however Chapter 11 debtors can act as self-appointed trustees. They are responsible for accurately tabulating assets, reporting secured and unsecured creditors, and filing monthly operating reports of the failing enterprise. Business bankruptcy attorneys can provide invaluable oversight, legal advice, and assistance in expediting debtor findings.
Whether the company is a sole proprietorship with an individual owner; a corporation with multiple invested owners or shareholders; or a partnership with two to three owners; the business bankruptcy lawyer will work to ensure that all debtor assets are protected, with the exception of those that are non-exempt. Under Chapter 11, personal assets of corporate shareholders are not at risk. Shareholders' risks are limited to the amount of capital invested in the corporation. However, a sole proprietor's business and personal assets may be in jeopardy, unless a homestead exemption is filed. Bankruptcy law makes provision for debtors to retain personal exempt property and still honor obligations to creditors. In Old Testament Biblical times, individuals would give, or pledge, to creditors a personal garment as collateral for borrowed monies. Mosaic law required that the item be returned by that evening: "If thou at all take thy neighbour's raiment to pledge, thou shalt deliver it unto him by that the sun goeth down. For that is his covering only, it is his raiment for his skin wherein shall he sleep? And it shall come to pass, when he crieth unto me, that I will hear; for I am gracious." (Exodus 22:26-27) Experienced business bankruptcy attorneys can provide legal counsel to help protect debtors' personal resources while ensuring creditor demands are legally met.
Creditors' lawyers also advise them regarding legal rights and obligations, including cessation of collection efforts upon receipt of the debtor's notice of bankruptcy. Lawyers represent creditors at 341 hearings, held 30 days after the debtor files the Chapter 11 petition, and can help creditors file objections to the proposed reorganization plan and negotiate with the debtor's attorney. Should creditors object to the debtor's plan or treatment of claims, attorneys may conduct adversarial proceedings, lawsuits against debtor within the original Chapter 11 case.
To find experienced business bankruptcy lawyers, debtors can consult a local chapter of the American Bar Association, browse the Internet, or check out the telephone directory. Consumers should select an attorney based on prior business bankruptcy experience. Not all lawyers handle cases for corporations or partnerships. The advantage of having Internet access is that debtors and creditors can shop online for legal assistance before committing to a contractual agreement. Most business bankruptcy lawyers will offer free initial consultations and stipulate work to be performed for an hourly or flat rate fee. Consumers should not be shy about getting referrals from trade associates, family and friends. In spite of high-powered marketing and glitzy ads, satisfied customers are business bankruptcy attorneys' best advertisements.
Business Bankruptcy LawyersBusiness bankruptcy lawyers can help companies to find out options on how to continue to operate despite financial problems. Chapter 11 is the type of bankruptcy that businesses usually choose for restructuring. Companies that are eligible for filing Chapter 11 include partnerships, corporations, and sole proprietorships. Sole proprietors must include their personal assets along with company assets whereas a partnership or corporation just includes company assets. Business bankruptcy lawyers oversee the appointment of a trustee to monitor the progress of the preceding. The trustee holds the meeting with the creditors and makes sure that the company complies with all the requirements set by the court. A debtor has to attend a credit counseling course before he or she can file bankruptcy. In most cases companies who want to continue operating and intend on paying creditors over time can accomplish this by filing Chapter 11.
Companies usually have two choices when filing bankruptcy. They can liquidate their assets and use the proceeds to pay debts under Chapter 7 or they can restructure under Chapter 11. Business bankruptcy lawyers can give advice on the best options based upon a company's individual circumstances. After filing Chapter 11 a company can get an automatic stay to keep creditors from legally pursuing them. In addition, an automatic stay suspends judgments, foreclosures, and repossessions of property from taking place. A creditor that has security interest can file to grant relief from the automatic stay. The relief may be granted if the property is not necessary for restructuring. If the property is needed in order for the company to continue operating then the court will probably grant relief to the creditor.
The company who chooses to do a restructuring and reorganization will need to file a plan on how they are going to accomplish this. Business bankruptcy lawyers can help with putting the plan together. The trustee and all creditors must be mailed a copy of the plan. Creditors have the right to object to the plan but the court may go ahead and rule in the favor of the company. When a plan is accepted by all the creditors and it qualifies according to Chapter 11 bankruptcy rules it can be discharged. However, the discharge may not happen until the debtor fulfills payments under the plan to creditors or other interested parties. "Those things, which ye have both learned, and received, and heard, and seen in me, do: and the God of peace shall be with you" (Philippians 4:9).
Once an estate is completely reconciled a final decree can order the case to be closed. Business bankruptcy lawyers know that there are some debts that can not be discharged. These include debts for alimony and child support, student loans or other loans guaranteed by the government, debts caused by personal injury to others, and debts for criminal restitution. This is true no matter what type of bankruptcy is filed. Before a final decree is granted the court may make a determination that the company needs to file under a different Chapter. Another way to file for discharge of financial debts can be done under Chapter 7. Talking to a lawyer who specializes in this field will help a company or an individual decide the best way to file.
Some companies may want to consider filing Chapter 7 in the effort of liquidating assets and paying off creditors. Assets can include anything that has value including property. A debtor will need to supply the court with a list of assets and liabilities along with current income and current expenses. Business bankruptcy lawyers can help the debtor to compile all of this information. A debtor will have to pay a filing fee to the court, an administrative fee, and a trustee surcharge fee. In addition, there must be a list of all of the creditors and the amounts owed to them, a list of all property, monthly living expenses in detail, and all of the sources and amounts of income. Most attorneys have schedules to use to record of all the information needed by the court.
Property can be saved from the liquidation of the proceeding by filing a schedule for exempt property. Business bankruptcy lawyers should understand what the laws are pertaining to exemptions by the Federal government and by the State government in which the debtor resides. If the property is under a lien then the owner of the lien should be informed about the property being exempted from the Chapter 7 proceedings. The owner of the property may want to get advice from an attorney about this matter. The debtor may reaffirm a debt with a reaffirmation agreement in which case the debt would not be discharged but the debtor will continue to pay on it.
An automatic stay stops any collection proceedings from taking place against the debtor. Any pending lawsuits against the debtor must be stopped including judgments, repossessions, and wage garnishments. The meeting of the creditors gives the creditors an opportunity to voice their protests against the Chapter 7. A trustee of the case will take care of the liquidating the assets if there are any. Creditors will need to file a claim to be eligible for payment of the liquidated assets. If there has not been any fraud or any reason to suspect fraud then the debtor is usually discharged of the debts. More information about Chapter 7 and Chapter 13 can be found online by doing a search for Business bankruptcy lawyers.