Guide To Filing A Chapter 11 Oakland
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Bankruptcy is a legal provision available to individual consumers, charities, businesses and any other legal entity that consumes debt. It is meant to resolve bad debts as well as give debtors a chance to get rid of their debts and start life afresh and free of debt. When looking to file a chapter 11 Oakland residents should always consult a bankruptcy attorney.
This type of bankruptcy is available to businesses and legal entities that have a lot of bad debt. Individual consumers cannot use it to get rid of their debts. There is one important condition that a business must satisfy to qualify. A business must have a stable income source that can be used to pay off the debts.
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 benefit of this option is that it allows debtors to retain their assets. Nothing is liquidated, so the debtor can clear their debts silently or confidentially. Secondly, the debtor can continue running their business they way they have been doing in the past. With liquidation, the business may have to shut down.
The first thing that will be done once you file the necessary bankruptcy paperwork is the appointment of a trustee by the court. This is the person who will oversee the whole process. The trustee will start by looking at financial statements, business records and other documentation to assess the financial position of the business as well as the total qualifying debts. The trustee will also take stock of all the assets in the business and put a freeze on their sale. The trustee will also forward all monthly payments to creditors as required by law.
There are some business debts that cannot be written off no matter what. Taxes, for instance, must be paid together with penalties, fines and interest on overdue taxes. Therefore, you should keep this in mind when filing for bankruptcy. After all, a large fraction of your debt may comprise taxes, fines and penalties as well as interest on the same.
The beauty of a chapter 11 is that it provides for debt restructuring. In fact, it is the debtor who is required to come up with a repayment plan to clear their business or corporate debts. The monthly payments are based on the average net income of the debtor, and not what they owe. This means that they can easily clear their debts without making drastic changes in their business.
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 type of bankruptcy is available to businesses and legal entities that have a lot of bad debt. Individual consumers cannot use it to get rid of their debts. There is one important condition that a business must satisfy to qualify. A business must have a stable income source that can be used to pay off the debts.
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 benefit of this option is that it allows debtors to retain their assets. Nothing is liquidated, so the debtor can clear their debts silently or confidentially. Secondly, the debtor can continue running their business they way they have been doing in the past. With liquidation, the business may have to shut down.
The first thing that will be done once you file the necessary bankruptcy paperwork is the appointment of a trustee by the court. This is the person who will oversee the whole process. The trustee will start by looking at financial statements, business records and other documentation to assess the financial position of the business as well as the total qualifying debts. The trustee will also take stock of all the assets in the business and put a freeze on their sale. The trustee will also forward all monthly payments to creditors as required by law.
There are some business debts that cannot be written off no matter what. Taxes, for instance, must be paid together with penalties, fines and interest on overdue taxes. Therefore, you should keep this in mind when filing for bankruptcy. After all, a large fraction of your debt may comprise taxes, fines and penalties as well as interest on the same.
The beauty of a chapter 11 is that it provides for debt restructuring. In fact, it is the debtor who is required to come up with a repayment plan to clear their business or corporate debts. The monthly payments are based on the average net income of the debtor, and not what they owe. This means that they can easily clear their debts without making drastic changes in their business.
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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