Mounting bills can put stress on any family's budget, but when there isn't enough income coming in to pay off those debts, late bill payments are inevitable. If you find yourself facing insurmountable debt and bankruptcy appears to be your only option, contact an experienced bankruptcy attorney to discuss your options.
What You Need to Know about Bankruptcy
Helpful Information from Attorney Angela M. Cooper
If you are struggling to meet your financial obligations and considering filing for protection under the federal bankruptcy law, you may be uncertain of the law, the process or your rights in a bankruptcy proceeding. This page is designed to answer your basic questions about bankruptcy. To learn more about our bankruptcy practice, see our bankruptcy overview page.
At the Cooper Law Firm LLC, in Mobile County, Alabama, we bring over 10 years of practice experience to individuals considering filing under Chapter 7 or Chapter 13. We believe that every question you have deserves a clear and comprehensive answer. When you hire us to help you through a personal bankruptcy filing, you will work directly with attorney Cooper throughout the process, from the initial petition through post-bankruptcy issues.
To set up a free initial consultation, contact our office online or call us at 251-272-3831 (toll-free at 888-894-4985).
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Contact an experience bankruptcy lawyer in Mobile, Alabama. At the Cooper Law Firm LLC, we have handled Chapter 7 and Chapter 13 filings for over 10 years, preparing all the necessary paperwork and acting as your advocate with creditors, the trustee and the court. We can help you use the bankruptcy laws to get a fresh start. Free initial consultation.
For experienced counsel in bankruptcy, contact attorney Angela M. Cooper, in Mobile, Alabama, to set up a free initial consultation. We have helped men and women get a fresh start with a Chapter 7 or Chapter 13 filing for over 10 years. We built our practice on a commitment to personal service and attention, providing clear and comprehensive answers to all your questions.
Commercial Bankruptcy
Like a consumer, a business sometimes finds itself in the uncomfortable position of being unable to pay its debts. One solution is to file for bankruptcy, a legal process in federal bankruptcy court that releases the business from the obligation to pay all or some of its debts. The experienced lawyers at Angela Cooper in Mobile, Alabama advise business owners about whether bankruptcy is right for them.
Bankruptcy Choices for Small Businesses
Businesses must choose among alternative types of bankruptcies, each of which corresponds to a different chapter of the federal Bankruptcy Code. Businesses usually choose either Chapter 7 or Chapter 11, or occasionally Chapter 13. Sometimes businesses can be involuntary drawn into bankruptcy by their creditors, who face stiff financial penalties if they initiate an involuntary bankruptcy for invalid reasons.
Chapter 7
Chapter 7 bankruptcies are called "liquidation bankruptcies." Chapter 7 is usually employed by consumer debtors, but can also be used by businesses that want to liquidate their assets to be relieved of debt. A Chapter 7 bankruptcy is commenced when the business files a petition with the bankruptcy court. The court then orders an automatic stay of all collection action against the business and its property. A court-appointed trustee manages the details of the bankruptcy, selling business assets to satisfy business debt, to the extent possible. At the conclusion of the proceeding, remaining debts of the business are not discharged as with an individual debtor, but generally the business ceases to exist because its assets are gone and it is no longer a profitable concern.
Chapter 11
In Chapter 11 bankruptcies, which are usually filed by businesses and rarely by individuals, the commercial debtor is usually allowed to stay in business throughout the bankruptcy proceedings. A business debtor may only operate independently in its ordinary course; transactions outside the ordinary course of business require court approval.
A Chapter 11 proceeding, like one under Chapter 7, is initiated by filing a petition, but a trustee is not automatically appointed. Although the bankruptcy judge may decide to appoint a trustee in a Chapter 11 case, it is the exception rather than the rule. As in Chapter 7, the filing of the bankruptcy petition stops creditors from attempting to collect their debts.
The debtor has time to file a proposed plan of reorganization. The plan of reorganization sets forth in detail how the debtor intends to conduct its business, while continuing to make payments to its creditors. In some situations, creditors may instead or also propose plans of reorganization. Creditors are divided into classes with varying rights depending upon the types of debt they hold. The approval process involves negotiation and input from creditors. Ultimately, a plan must be approved by the court. In some cases, the court approves the plan even though some of the creditors did not. If no plan is approved, however, the bankruptcy is often converted to a Chapter 7 liquidation or may be dismissed.
The choice between Chapter 7 and Chapter 11 is not necessarily permanent; once proceedings have begun, a case may be converted to a different chapter, under certain circumstances.
Conclusion
Bankruptcy may not be the best option for every business, but sometimes it is the best choice a business owner can make. Alternatives to bankruptcy include working informally with creditors toward a repayment plan or assigning assets for the benefit of creditors. A lawyer experienced in bankruptcy law, like those at Angela Cooper in Mobile, Alabama, can help a business decide whether bankruptcy best meets its needs.
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