When you own or operate a business venture, you know that legal challenges are often a cost of doing business. A bankruptcy petition can offer some benefit in the midst of a business dispute. If you are involved in a dispute that threatens the viability of your business, but the long-term prospects are good, you can use the bankruptcy laws to minimize the impact of litigation. If, on the other hand, your business has little chance of success, a Chapter 7 liquidation proceeding can be the most effective way to shut down business operations.
The Advantages of Filing a Bankruptcy Petition
The first, and perhaps most powerful benefit you get when you seek protection in bankruptcy is the automatic stay. With the automatic stay, you have the power of the bankruptcy court behind you, prohibiting creditors from calling you, writing you, taking legal action against you or using any means other than the bankruptcy proceeding to collect the debt from you. A creditor can petition the bankruptcy court to lift the automatic stay, but such a request is rarely granted, provided you don’t engage in fraud or misrepresentation, and that honor your commitments in the bankruptcy process.
If you plan to close your business, your best option is a Chapter 7 filing. However, if you need temporary relief, but believe that your business has long-term potential, you may want to proceed under Chapter 11. A Chapter 11 petition allows you to restructure or renegotiate your debt, so that it becomes affordable. You’ll have to submit a reorganization plan, which must be approved by your creditors and by the court.
Contact Neuner & Ventura, LLP
We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
Representing Clients across South Jersey