It is a common misnomer that only individual people may declare bankruptcy. In fact, federal bankruptcy laws also allow partnerships, corporations and other business entities to take advantage of these provisions. Accordingly, one of the best options for business owners to gain some relief from their debts could be to pursue Chapter 7 bankruptcy.
Chapter 7 bankruptcy provides a legal avenue for companies that are going out of business to deal with their outstanding debts. While many corporate entities shield their owners from personal liability for business debts, others place their owners on the hook for any outstanding liabilities. In either event, Chapter 7 bankruptcy could provide much-needed relief.
A New Jersey Chapter 7 business bankruptcy lawyer could help business owners to file for Chapter 7 bankruptcy. Our bankruptcy attorneys can work with people to gather the necessary documentation, file the correct paperwork, and attend all necessary hearings and meetings.
One of the key issues with ending a business is often dealing with any outstanding debts. In situations where these outstanding debts are greater than the businesses’assets, it may be impossible for a company to properly close. Chapter 7 bankruptcy is one of the most common ways for insolvent businesses to wind down their operations, as it allows a business to discharge all its debts and get the creditors off its back.
The process involves taking all the assets of the company—including customer contracts, machinery or other tools used in the business, real estate, and any outstanding business funds in bank accounts—and selling them. The proceeds are then placed into a fund used to pay of all creditors. Once this process is complete, all obligations of the business are considered fulfilled.
All bankruptcy proceedings in New Jersey are controlled by the local federal bankruptcy court. The process beings with the filing of Bankruptcy Form 201. In addition to this form, the business owner must also file information concerning the business’s assets and liabilities, any property owned by the business, and information concerning any debts owed to creditors.
All this information is passed to a trustee appointed by the court. Their role is to gather all the necessary details regarding qualifying property, which is then sold to liquidate all the business’s assets. Following this, the trustee brings the creditors and business owners together to arrange payments to take care of the debts.
Once this process is finished, the court may certify the bankruptcy proceedings as complete. The company is then out of business and no longer has any liabilities. A Chapter 7 business bankruptcy lawyer in New Jersey could help companies ensure that their paperwork is correct and filed on time, and that the meetings go according to plan.
It is an unfortunate fact that not every business will succeed. When this is the case, business owners need a sustainable path to end the company and deal with any outstanding debts. Filing for Chapter 7 bankruptcy could be a great option for completing this process.
A New Jersey Chapter 7 business bankruptcy lawyer could work with you and your company to choose the bankruptcy option that provides the best chances for a positive outcome, while considering your wishes and the potential negative repercussions. This process could provide a solid winding down of the company and discharge any outstanding debt. Contact an attorney today to discuss your options.Call for Consultation (609) 250-0369
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