Process of Filing for Bankruptcy
A company, that is facing serious debt problems, may file for bankruptcy following the proper legal procedures. Seeking proper legal advice from a good bankruptcy lawyer can help your company explore the many options that can be taken to carefully weigh if truly filing for bankruptcy is the last resort in solving for your insolvency problem.
Bankruptcy is a legal process of permitting businesses or consumers to repay all or some of their debts under the guidance and protection of the court. There are two types of bankruptcy, liquidation and reorganization, which is legally considered depending on the nature of the debt problem of the business.
When you have hired a bankruptcy lawyer, you should expect that he/she should first go over your income, debts and assets, so that in studying this, options can be presented and, after that, you will have a pretty good idea if filing for bankruptcy is a good option to take.
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Before considering on filing for bankruptcy, a good bankruptcy lawyer should come up with a contingency, payment plan that is within your means and that can assure your creditors and, thereby, can prevent further harassment from your creditors due the late payments. With the bankruptcy lawyer presenting a payment plan to your creditors will definitely earn their confidence on your effort of resolving your debts to them in a professional way.
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If the lawyer has find it truly difficult to come up with a suitable plan for you, then he/she will inform you to file for bankruptcy for your best interest, orient you on the type of bankruptcy to be applied for, work on the filing date, and provide you a job contract to do this. Whichever is the state of your debt condition, the bankruptcy lawyer will provide you information on the types of bankruptcy procedures and which among these should you file for.
If your condition falls under liquidation, you are either advised to file for either Chapter 7 or Chapter 13 of the Bankruptcy Law. By filing for Chapter 7 the debtor is legally allowed to sell his/her non-exempt properties as exchange payment for his/her debts to the creditors. If Chapter 13 is the option decided, the debtor is allowed to keep his/her properties and instead repay the creditors all or a portion of his debts over a period of 3 to 5 years. The usual norm, after filing for either Chapter 7 or 13 and granted by the court, is to appoint a trustee to oversee the payments of liquidation of the assets.
Chapter 11 is filed for if the lawyer sees that the company is still viable so that the law will permit for a reorganization of the debt load to allow the company to stay in business.
So you can resolve your financial problems, legally and capably, it is always best to leave this job worked out by a bankruptcy lawyer. And with that hopefully worked out, you are on your way to a fresh start in life.