When your business has a lot of bad debt that has become unsustainable, you should consider seeking business bankruptcy to enable you to offset the debt. Otherwise, creditors and suppliers will always pay you a visit, make threatening phone calls and write you emails to demand payment. To avoid all these stresses, all you need to do is file for bankruptcy. In that regard, you will need to hire a competent chapter 11 Oakland lawyer.
This bankruptcy option is available to corporate or business debtors, so individual consumers cannot use this option to get rid of their personal debts. There is one major requirement that a firm must satisfy to qualify for this option; they must have a reliable source of income that can be utilized in servicing the reorganized debt.
The default type of bankruptcy is liquidation under chapter 7. With this option, the assets of the business, including; plant, machinery and inventory, are liquidated to offset the debts. With debt restructuring, however, the business gets to retain assets and continue operations while servicing their debts.
The main advantage of this chapter is that it makes it possible for business owners to retain ownership over their business assets. In business, liquidation translates to shutting down of business operations. It is also much more confidential than liquidation.
A trustee is normally appointed by the court when a bankruptcy petition is received. The work of the trustee is to carry out due diligence and ensure the law is followed to the letter throughout the bankruptcy process. The trustee also acts as the intermediary between creditors and the debtor.
It is important to note that there are many types of debts that cannot be written off through bankruptcy. Taxes, penalties and interest on unpaid taxes are not subject to bankruptcy proceedings, so you still have to pay off your taxes when you are declared bankrupt. Only death can absolve you from paying taxes.
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.
This bankruptcy option is available to corporate or business debtors, so individual consumers cannot use this option to get rid of their personal debts. There is one major requirement that a firm must satisfy to qualify for this option; they must have a reliable source of income that can be utilized in servicing the reorganized debt.
The default type of bankruptcy is liquidation under chapter 7. With this option, the assets of the business, including; plant, machinery and inventory, are liquidated to offset the debts. With debt restructuring, however, the business gets to retain assets and continue operations while servicing their debts.
The main advantage of this chapter is that it makes it possible for business owners to retain ownership over their business assets. In business, liquidation translates to shutting down of business operations. It is also much more confidential than liquidation.
A trustee is normally appointed by the court when a bankruptcy petition is received. The work of the trustee is to carry out due diligence and ensure the law is followed to the letter throughout the bankruptcy process. The trustee also acts as the intermediary between creditors and the debtor.
It is important to note that there are many types of debts that cannot be written off through bankruptcy. Taxes, penalties and interest on unpaid taxes are not subject to bankruptcy proceedings, so you still have to pay off your taxes when you are declared bankrupt. Only death can absolve you from paying taxes.
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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