There are three main types of bankruptcy. These are chapters 7, 11 and 13. Chapter 11 Oakland residents should know is meant for businesses and corporate entities. If you own a business that has a lot of bad debt, you can get debt forgiveness through this bankruptcy option. However, you should hire a competent bankruptcy lawyer to help you out with the case to ensure that everything goes as planned.
It is easy for a business to become bankrupt. For instance, the firm can borrow commercial loans, get equipment financing and buy supplies on credit. If they do not generate enough sales, however, the firm may not be able to service their debts. This will lead to an increase in the outstanding balance due to accruing interest and penalties among other fees.
This bankruptcy option basically provides for debt restructuring as opposed to complete debt forgiveness. The management of the business will be required to pay a certain amount of money every month for several years to offset the debt partially. The unpaid amount is usually written off after the bankruptcy period. As a result, the business can retain all their assets.
It is important to note that with this type of bankruptcy, the business can continue to offer goods and services since no assets will be liquidated. However, the trustee will become the new manager of the business, and every important decision must go through them. Furthermore, no business assets can be disposed of. Similarly, no major assets can be acquired by the business.
It is important to note that bankruptcy can be a huge setback for any business. While it can give you debt forgiveness, it will also deny you access to affordable loans. Your business may also not be able to get goods on credit. Furthermore, most lenders will quote exorbitant rates on any loans they offer to the business.
When looking for a suitable bankruptcy lawyer to hire, there are several key factors that must be considered. This is because there are many lawyers in the industry and they all claim to be the best. Start by comparing the amount of experience that the top-ranked lawyers have and give priority consideration to the most experienced attorneys as far as bankruptcy cases go.
After filing the necessary paperwork in court, the management of the business seeking bankruptcy protections will be asked to draft a repayment plan based on their average monthly income. The plan will be presented to creditors in a meeting of creditors organized by the trustee. If approved by the court, the firm will enjoy all the protections that come with bankruptcy.
Bankruptcy can be voluntary or involuntary depending on who files the case. For instance, creditors can seek to have a business declared bankrupt to recover their debt. In such a case, the bankruptcy is involuntary. In many cases, however, business owners normally rush to court to get protection from creditors and debt forgiveness in a voluntary type of bankruptcy. This bankruptcy chapter can help a business to get rid of most of their bad debts.
Get a summary of the things to keep in mind when picking a Chapter 11 Oakland attorney and more information about a reliable lawyer at http://www.centralcoastbankruptcy.com/chapter-11.html now.