Business Bankruptcy Process: What To Know
Challenging circumstances while operating a small business necessitate tough choices. A business bankruptcy in New Jersey can offer business owners relief from debt and a chance for a fresh financial beginning.
However, due to the unique nature of each case, filing for bankruptcy may have risks if one lacks proper planning and experience. Established in 1994, the Law Offices of Darin D. Pinto, P.C., has a skilled New Jersey business bankruptcy lawyer who provides attentive listening, a focus on the broader context and the legal guidance needed to handle these challenging times. David D. Pinto, a Westfield business bankruptcy attorney, uses over 32 years of experience to benefit clients across Westfield, Newark and the surrounding areas.
Chapter 7: Liquidation Bankruptcy
For businesses that are no longer economically viable, Chapter 7 provides a path for closure and debt relief. This chapter mandates the sale of all business assets to settle outstanding debts.
Chapter 11: Reorganization Bankruptcy
Chapter 11 bankruptcy is designed for businesses that aim to restructure and continue operations. It allows businesses to force creditors into negotiating payment plans while keeping the business operational.
How Does Business Bankruptcy In New Jersey Work?
Filing for business bankruptcy in New Jersey offers immediate relief from the barrage of debt collection calls and creditor harassment. This powerful legal tool is known as the automatic stay. Once the bankruptcy petition is filed, creditors are legally mandated to cease all collection activities. This provides the business with a temporary respite to evaluate its financial situation.
The typical duration for businesses opting for Chapter 7 bankruptcy falls between four and six months. On the other hand, Chapter 11 bankruptcy, often chosen by businesses aiming to restructure and continue operations, has a more extended timeline. This process spans one to five years, during which the business adheres to a court-approved repayment plan.
A proper business bankruptcy in New Jersey involves key steps from business bankruptcy attorney Mr. Pinto. After a thorough consultation, the he and his team will help you with the following:
- Determination of bankruptcy chapter: Businesses must decide on the most appropriate bankruptcy chapter between Chapter 7 for liquidation and Chapter 11 for their situation.
- Preparation and filing of bankruptcy petition: This document officially initiates the legal proceedings and outlines the business’s financial situation.
- The automatic stay takes effect: The automatic stay immediately halts all debt collection activities upon filing the petition.
- Creditors’ meeting: A crucial step in the bankruptcy process, the creditors’ meeting allows creditors to question the business about its financial status.
- Development of repayment plan: A detailed repayment plan is crafted for businesses opting for Chapter 11 bankruptcy.
- Submission and approval of the reorganization plan: Chapter 11’s reorganization plan allows the business to implement changes upon court approval.
- Credit counseling requirement: As per New Jersey bankruptcy regulations, individuals filing for bankruptcy must undergo credit counseling.
- Discharge of debts: This is when the bankruptcy closes and the remaining eligible debts are discharged.
Attorney Pinto can explain every legal detail in consultation with an eye toward your specific business goals.
Lets Us Advocate For Your Financial Needs
A reputable New Jersey business bankruptcy lawyer can make a thorough evaluation of your company’s financial situation, guiding you through the complex choices of Chapter 7 or Chapter 13. Call Darin D. Pinto at 908-913-6168 or use his online form to schedule a free consultation with a skilled Neward and Westfield business bankruptcy attorney.