Bankruptcy can be a process that will help your company repay or eliminate its debts under the protection of the bankruptcy judge. You can file bankruptcy to protect yourself from creditors' harassment and have some of your debt discharged.
It allows struggling borrowers to reduce their losses and reorganize their finances. Business bankruptcy can be described as liquidation or restructuring, depending on what type of bankruptcy is required. If you want to get more information about business bankruptcy, you can visit https://mentchlaw.com/.
When a business cannot pay its bills, it becomes bankrupt. A company can declare bankruptcy if it is unable to pay its creditors. Most cases are not likely to be successful because the company's financial situation is so bad that it cannot pay its creditors.
A business should file for bankruptcy, rather than wait for creditors to impose involuntary bankruptcy. There is a chance that creditors will impose a lien upon assets that the owners of the business must pay.
A lien is an agreement whereby the bank or creditor can sell collateralized or mortgaged property that has not been paid off.
This type of bankruptcy requires that you file a repayment plan to the bankruptcy court detailing your plans to repay your debts. The plan can be for three to five years and must pass a liquidation exam that ensures payment to unsecured creditors.
Many bankruptcy lawyers and law firms can assist you with filing bankruptcy. They are experts in all aspects of bankruptcy law and corporate affairs. An attorney who specializes in bankruptcy can help you negotiate with creditors and avoid common mistakes that could lead to larger problems down the road.