Mounting bills can put stress on any family's budget, but when there isn't enough income coming in to pay off those debts, late bill payments are inevitable. If you find yourself facing insurmountable debt and bankruptcy appears to be your only option, contact an experienced bankruptcy attorney to discuss your options.
Central Texas Chapter 7 Bankruptcy Attorney
Chapter 7 bankruptcy is a fairly quick and simple way for individuals, families and small businesses to find debt relief and a fresh financial start by discharging unsecured debts, including credit card debts and medical bills. As a bankruptcy lawyer in Austin, Texas, I, Charles Nettles, guide clients through the process of Chapter 7 bankruptcy while ensuring that their individual circumstances get the attention they deserve.
I have practiced law for over 25 years, most of which has been exclusively focused on providing bankruptcy solutions to clients in Central Texas. Let me help you get out of debt. Contact my office today for a free initial consultation. Either send me an e-mail or call me at 512-443-5545 (toll free at 800-460-5555).
I am a Board Certified Bankruptcy Attorney assisting Individuals and Small Businesses File Bankruptcy.
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Filing for bankruptcy is never an easy decision. At my firm, I will help you analyze your situation to figure out if bankruptcy is the right solution for you. I will always provide honest advice, even when it is in your best interest not to hire me to file for Chapter 7 bankruptcy.
Some people have accumulated excess debt over long periods of time. Others have had it build up quickly after a job loss, illness or accident. In either case, Chapter 7 bankruptcy may be able to help you get the debt relief that you deserve.
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 Charles R. Nettles, Attorney at Law in Austin, Texas 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 Charles R. Nettles, Attorney at Law in Austin, Texas, can help a business decide whether bankruptcy best meets its needs.
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