Hayward Corporate Bankruptcy Lawyer

A corporate bankruptcy is a voluntary legal proceeding that is initiated by companies experiencing financial difficulties. These filings often take the form of either Chapter 7 or Chapter 11 bankruptcy. While a Chapter 7 bankruptcy allows a person filing bankruptcy to liquidate their business, a Chapter 11 bankruptcy allows a person to financially reorganize or restructure a business. If your business is facing financial difficulties and you believe that it might benefit from bankruptcy, it is important to understand some key details of the bankruptcy process. It is also important to obtain the assistance of an experienced attorney who can help you navigate the process.

The Goal of Chapter 7 Bankruptcy

Chapter 7 bankruptcy involves the liquidation of a business debtor’s assets. After filing for Chapter 7 bankruptcy, a trustee is selected to manage the debtor’s business. In some situations, a trustee might continue to operate a business for a short amount of time. In other situations, a trustee might immediately begin to take steps to close the company.

There are several advantages realized by companies that file for Chapter 7 bankruptcy, but some of the benefits offered by this method include:

  • A business that files for Chapter 7 is offered the opportunity for a new start because certain debts are eliminated.
  • Any assets that are acquired after filing for Chapter 7 will not be included in the bankruptcy, which means that the company will be able to retain them.
  • There are not any limitations on the amount of debt required for a company to be considered eligible for Chapter 7 bankruptcy.

Corporate Bankruptcy and Chapter 11

A Chapter 11 bankruptcy is often advantageous for companies that want to file for bankruptcy because the company is able to continue operating its business without interference from the harassment of creditors.

After a period involving notice and a hearing, bankruptcy courts sometimes allow a debtor to sell unprofitable assets or reject burdensome leases. A debtor is often given 120 days in which to file a plan of reorganization for creditor consideration and vote.

Some of the advantages gained by companies that file for Chapter 11 bankruptcy include the following:

  • Businesses that file for Chapter 11 bankruptcy are able to continue business operation.
  • Filing for Chapter 11 bankruptcy results in an automatic injunction that prohibits debtors from harassing anyone at the business.
  • Some businesses are able to temporarily defer installment debts or rents.

Speak with a Knowledgeable Bankruptcy Lawyer

Corporate bankruptcy involves a number of tough choices and significant obstacles, which require a wealth of knowledge. As a result, if your company has entered a financially difficult time and you believe that the best option is bankruptcy, you should not hesitate to speak with a knowledgeable lawyer. Speak with a Hayward corporate bankruptcy attorney at the Law Offices of Melanie Travare today to schedule an initial free case evaluation.