Considering bankruptcy is a difficult decision for any company. Deciding which chapter will best suit your company’s situation is tricky and should only be done under the advisement of a bankruptcy law firm. But doing research on your own is always a great idea so that you know what you will be getting in to. It may also help ensure you are not taken advantage of. Just keep in mind that bankruptcy attorneys are best qualified to help you decide which chapter will suit your needs. So what are the differences between Chapter 7 and Chapter 11?
Chapter 7 bankruptcy is a liquidation bankruptcy that can be filed by either companies or individuals. In this type of bankruptcy you will be required to sell off all nonexempt assets and the money raised from the sales will go to pay off your debt. Any remaining debt will usually be discharged, which means you will never be liable to pay it after filing for Chapter 7. If you are at risk of foreclosure, Chapter 7 may help you slow down the process, but will most likely not help you avoid it all together. If you are concerned you are at risk for foreclosure in Miami, contact a Bankruptcy Miami lawyer as soon as possible to find out what options may be available for your situation. If your company is considering Chapter 7, you will most likely be forced to close your business. This can be very devastating both financially and emotionally for business owners, so contact a bankruptcy attorney as soon as possible to avoid this type of bankruptcy.
Chapter 11 is a rehabilitation bankruptcy that is only available to businesses. In this type of bankruptcy your business will remain open and restructure itself to run more efficiently and earn a higher profit. This type of bankruptcy is preferred by most businesses because it allows you to protect your company from falling further in to debt and keep their doors open. Your bankruptcy lawyer will reach an agreement with your debtors that will allow you to make affordable monthly payments to pay off most of your debt in exchange your debtors will agree to discharge the remaining debt at the end of the payment period. Your company will be required to be completely transparent financially and you will be required to change the way your company runs. For example, you may be forced to close stores that are not profitable or end contracts with companies that are not in your best interests. It is important to hire bankruptcy law firms as soon as possible if you want to file this type of bankruptcy because there must still be a company worth saving.
Bankruptcy does not have to mean the end of your company. You must contact a bankruptcy lawyer as soon as you are having financial difficulties if you want to avoid having to close the business. There are many other options before you need to consider bankruptcy and bankruptcy lawyers know all the tricks to help you save your business.