There are many bankruptcy chapters that individual consumers, businesses, charities and other legal entities can use to get rid of their debts. This legal provision has been provided under the federal bankruptcy act, but state law also has some provisions that guide the entire process. If you have been weighed down by debt, you can use bankruptcy to get a fresh start. The key to success, however, lies in hiring a chapter 11 Oakland lawyer.
Chapter 11 is available to business and corporate debtors. Any legal entity that consumes debt can apply for legal protections under this option. However, the business must have a regular source of income, which is predictable and considerable. If not, liquidation may be recommended by the trustee.
While the default type of bankruptcy calls for liquidation of assets owned by the firm to offset their debts, this option provides for reorganization of debts. The debtor is declared bankrupt, and gets all bankruptcy protections. In return, they agree to make monthly payments to the trustee, who distributes the payments to all the creditors. This goes on throughout the bankruptcy period, after which all unpaid debts are written off.
The main advantage of debt restructuring through chapter 11 over liquidation is that no assets are sold, the business can continue operating unhindered. This will make it easier for the debtor to clear all debts in question. Secondly, it can prevent a business from shutting down, which is always good news for the owner, the government and employees.
After filing the necessary paperwork in court, a bankruptcy trustee will be appointed. This is the person who will be in charge of the entire bankruptcy process. They will carry out due diligence on the financial position of the debtor to confirm that they meet all the minimum requirements for this option. If the debtor has a lot of valuable assets and an unreliable income, the trustee may recommend liquidation as opposed to restructuring of debts.
It is crucial to note that there are some debts that can never be written off. For instance, taxes must be paid no matter what. If you owe a lot of money in terms of business taxes, penalties and interest, you will be required to settle your debts as you continue to make payments towards settling your other debts.
Debt restructuring is a much better option than liquidation, especially when it comes to business debts. In the case of liquidation, you will have to shut down your business as all the plant, machinery, equipment and inventory will be liquidated without exceptions. With debt restructuring, you only need to use business income to pay a fixed monthly payment throughout the bankruptcy period.
Bankruptcy should only be considered after other options for dealing with debt, such as refinancing and debt consolidation, have failed. This is because bankruptcy comes with a number of unwanted effects. For instance, the debtor will be blacklisted by lenders as the bankruptcy entry will appear on their credit report. This will make it hard for the business to access credit facilities or any type of financing. Secondly, the business may not be able to get some tenders or jobs that require qualified firms that are not bankrupt.
Chapter 11 is available to business and corporate debtors. Any legal entity that consumes debt can apply for legal protections under this option. However, the business must have a regular source of income, which is predictable and considerable. If not, liquidation may be recommended by the trustee.
While the default type of bankruptcy calls for liquidation of assets owned by the firm to offset their debts, this option provides for reorganization of debts. The debtor is declared bankrupt, and gets all bankruptcy protections. In return, they agree to make monthly payments to the trustee, who distributes the payments to all the creditors. This goes on throughout the bankruptcy period, after which all unpaid debts are written off.
The main advantage of debt restructuring through chapter 11 over liquidation is that no assets are sold, the business can continue operating unhindered. This will make it easier for the debtor to clear all debts in question. Secondly, it can prevent a business from shutting down, which is always good news for the owner, the government and employees.
After filing the necessary paperwork in court, a bankruptcy trustee will be appointed. This is the person who will be in charge of the entire bankruptcy process. They will carry out due diligence on the financial position of the debtor to confirm that they meet all the minimum requirements for this option. If the debtor has a lot of valuable assets and an unreliable income, the trustee may recommend liquidation as opposed to restructuring of debts.
It is crucial to note that there are some debts that can never be written off. For instance, taxes must be paid no matter what. If you owe a lot of money in terms of business taxes, penalties and interest, you will be required to settle your debts as you continue to make payments towards settling your other debts.
Debt restructuring is a much better option than liquidation, especially when it comes to business debts. In the case of liquidation, you will have to shut down your business as all the plant, machinery, equipment and inventory will be liquidated without exceptions. With debt restructuring, you only need to use business income to pay a fixed monthly payment throughout the bankruptcy period.
Bankruptcy should only be considered after other options for dealing with debt, such as refinancing and debt consolidation, have failed. This is because bankruptcy comes with a number of unwanted effects. For instance, the debtor will be blacklisted by lenders as the bankruptcy entry will appear on their credit report. This will make it hard for the business to access credit facilities or any type of financing. Secondly, the business may not be able to get some tenders or jobs that require qualified firms that are not bankrupt.
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Find an overview of the benefits of consulting a Chapter 11 Oakland attorney and more info about an experienced lawyer at http://www.centralcoastbankruptcy.com/chapter-11.html right now.
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