Solving financial problems becomes extremely difficult if you are sent repeated debt reminders by your creditors. This is the case with every businessman and professional who are unable to grow due to increasing pressure of loan reminders. So, if you have run out of all financial resources and are plagued by the lack of liquidity of your business assets, do not panic. The first thing you need to do is call your bankruptcy attorney. Next, apply for bankruptcy after assessing the options available to you.
Applying for bankruptcy does not always end in liquidation of the assets of your company. Your firm will not be closed down entirely if there is a chance for you to revive your business in due course of time. Under Chapter 13 bankruptcy, every chance is given to the business owner to reorganize his enterprise and regain financial stature. This is done by extending the deadline of debt clearance by a period of three to five years. However, if the debtor wants to reorganize and stop all types of cash flow out from his business before he finally clears his debts, then he must file for Chapter 11 bankruptcy.
Very few are aware that unlike Chapter 7 and Chapter 13 bankruptcies, Chapter 11 bankruptcy allows the debtor to keep control of his business finances. The most important aspect however, is that you can prevent any kind of drastic money collection act by the creditors. This would include filing lawsuits, obtaining judgments, collecting on levies and garnishments.
The Role of Your Lawyer
Legal permit to stay any payment to creditors gives you and your lawyer ample scope to carry on with the business. You also get a chance to cancel a few debts while reorganizing your firm. Your attorney helps you reorganize your business by considering the following facts:
- How much debt you owe
- Type of debt and its aggregate amount
- Level of urgency
- Hidden problems in your business that your creditors may not be aware of.
The main job of the attorney henceforth, becomes negotiating with your creditors and settling debts by handing over parts of or the entire reorganized business. The Chapter 11 approach is ideal in case the business has more value than the assets that will be liquidated under Chapter 7. Reorganizing a business and handing it over to creditors help save jobs and clear debts much faster than Chapter 13.
Therefore, while facing a possible situation of bankruptcy, all business holders must make sure they hire the services of an experienced bankruptcy attorney in Wellington FL business owners must keep the advantages of Chapter 11 approach in mind before deciding with their lawyers which type of bankruptcy they will apply for.
