How To Weather Chapter 7 Business Bankruptcy |
30.06.2009 16:05 |
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Once the decision to file for Chapter 7 business bankruptcy has been made, going forward can seem like many giant leaps instead of small steps. Bankruptcy doesn't protect the business from all its debts; it still is liable for government fines and taxes. Understanding the laws that govern bankruptcy court is only the beginning. Not only is there enduring emotional turmoil, but the processes of presenting accounts, finding a trustee, and dealing with the paperwork can be a nightmare. Initiating The Process Filing for Chapter 7 business bankruptcy should be handled by an attorney. An attorney is the most qualified person to give business bankruptcy advice. If the expense of hiring one is too much, consulting with an attorney before starting is still tremendously helpful. This is a final decision and many people will suffer the consequences. Employees, stockholders, and creditors alike will take a financial blow as a result of the dissolution of the business that goes along with Chapter 7 business bankruptcy. Creditors can be vicious and having the extra distance between parties through a qualified third person not only preserves mental well being, it ensures fewer mistakes are made. When dealing with Chapter 7 business bankruptcy, secured creditors will get priority over other creditors when the liquidation is finished and the payout happens. Note that a creditor is secured when the collateral they have is worth more than the money owed to them. Going To Court The first step is to file a petition for Chapter 7 Business Bankruptcy in bankruptcy court, after which harassment from creditors stops almost instantly. Information about each creditor, such as their addresses, is needed for this process. After the petition is filed, a stay goes into effect halting further proceedings until the paperwork can be reviewed. During this time the creditors cannot legally bother the business owners. If any information in the paperwork is found to be incorrect, the protections offered to those filing for Chapter 7 business bankruptcy may be revoked. One may be allowed to add to the list of creditors after the initial filing, but this will add to the total expenses of filing in court fees. After the bankruptcy is deemed legitimate, a trustee is selected to handle the gathering and selling of assets for the creditors. This person has to be approved by the bankruptcy court, but may be suggested by the business owners. The trustee collects on all accounts receivable and sells all assets in the process of liquidating the business. |
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