In difficult economic times, bankruptcy filings increase. According to the Administrative Office of the US Courts, over 1.1 million people filed for bankruptcy in 2008, up 31% from 2007. Contact a knowledgeable and experienced attorney who can help guide you through the complicated maze of overcrowded bankruptcy courts.
Experienced Bankruptcy Attorneys
From a welcoming, highly professional office in Yardley, Pennsylvania attorneys Ann Hook Belknap and Patricia M. Mayer have over 30 years of combined experience in the law helping people in Bucks County and Montgomery County obtain legal debt relief. Our legal team is committed to delivering sound analysis, advice and representation—beginning with a free initial consultation to determine if bankruptcy is right for you.
Thank you for contacting Belknap & Mayer, P.C. Your message has been sent.
Call us now
or use the form below.
The proven lawyers of Belknap and Mayer, P.C., handle all forms of bankruptcy for individuals and small businesses, including Chapter 7, Chapter 11 and Chapter 13. We strive to help people make the best possible decisions for their financial stability and futures, whether their most pressing issues are credit card or medical debt, the threat of foreclosure, lawsuits, unpaid taxes, or other obligations that have become too difficult to manage alone.
Our Yardley-based bankruptcy law firm actively counsels and represents people in Southeast Pennsylvania communities such as Levittown, Northeast Philadelphia, Bensalem, Bristol, Croydon, Doylestown, Fairless Hills, Fallsington, Feasterville, Holland, Huntingdon Valley, Langhorne, Lower Makefield, Morrisville, New Hope, Newtown, Richboro, Southampton, Trevose, Warminster, Warrington, Washington Crossing and Willow Grove.
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 Belknap & Mayer, P.C. in Yardley, Pennsylvania 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 Belknap & Mayer, P.C. in Yardley, Pennsylvania, can help a business decide whether bankruptcy best meets its needs.
Copyright ©2009 FindLaw, a Thomson Business
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.
