Filing for bankruptcy is a complicated procedure that must be completed correctly. It is recommended that you consult a bankruptcy attorney for assistance with the process. Ensure that they can attest to having worked for both creditors and debtors in the past. Your attorney cannot and must not have any relationship with your company. This arrangement may create a conflict between your interests and those of your creditors.
After selecting an attorney, have them arrange a meeting with you, your financial advisors, and the board of directors. This meeting is used to determine whether or not the company can be spared. You have several available options. Chapter 11 bankruptcy provides for the reorganization of your business's debt. You will have to decide on some internal modifications that will enable you to pay your creditors on time. If the company's finances are irretrievably broken and cannot be saved, Chapter 7 is your best option. Chapter 7 is irreversible, as it signifies the conclusion of a commercial venture.
The following step is to file a bankruptcy petition with the court. This petition must include documentation of all of your creditors and the quantities owed to each, as well as the net income of your business.
After filing for Chapter 7 bankruptcy, you may not be completely free of your loans. Your attorneys will compare the net value of your company's secured and unsecured obligations to the value of its commercial assets. If they anticipate that the courts may seize your personal assets to satisfy your small business debt, they should have a legal defense ready to protect your assets.
If your attorney advises you to file for Chapter 11 bankruptcy, the next step is to develop a debt-management plan. This plan details how and how much you will repay each of your creditors. It also demonstrates how you will alter your business. These restructured plans must be paid off within five years and presented within 120 days of the filing of bankruptcy.""
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