Commercial bankruptcy lawyers specialise in business bankruptcies. Commercial bankruptcy lawyer Adelaide provide legal advice, draft documents, and represent their client in court proceedings. Ideally, they must have an undergraduate law degree and be licensed in their chosen state to practice.
Bankruptcy can help businesses manage debt while remaining operational, protecting assets such as tools of trade, inventory, accounts receivable and customer lists that are important to the operation.
Chapter 11
Businesses or individuals struggling to remain solvent may file Chapter 11 bankruptcy – commonly called reorganisation bankruptcy – which allows debtors to continue running their businesses while restructuring assets and debts with creditors.
If a majority of creditors who hold unsecured claims vote to accept your plan, it will be confirmed by the court. Your plan must comply with regular confirmation requirements and special “cramdown” requirements.
Chapter 13
Chapter 13 bankruptcy allows individuals with regular incomes to create a plan to repay debts over three to five years, such as mortgage arrears, past-due taxes or vehicle financing contracts. By using disposable income (money left over after reasonable expenses have been met) effectively, they may be able to use this method to pay creditors more quickly.
As part of your bankruptcy proceeding, creditors cannot pursue collection actions against you while it’s being processed – known as an “automatic stay.”
To file Chapter 13, either you or, with assistance from your commercial bankruptcy lawyer Adelaide must prepare a financial summary and propose a repayment plan. Furthermore, current assets, monthly income, and expenses must also be provided on court-approved forms. Individuals with business debts who own personal assets not at risk of liquidation may include them within their plan, while under Chapter 13, payments will be distributed among creditors monthly by a trustee; hardship discharge may become possible but typically is only granted at later points in your plan.
Liquidation
Liquidation is the practice of selling assets for cash to satisfy debts, either voluntary or compulsory, often associated with bankruptcy proceedings. An experienced commercial bankruptcy lawyer can explain this procedure to clients and offer guidance. Liquidation may be beneficial for companies that cannot afford their operations due to poor financial performance; however, this decision could compromise the future financing capabilities of the business.
Liquidation is an insolvency process reserved solely for corporate entities, typically occurring when no assets remain to pay debts. Similar to bankruptcy but differing significantly in several key ways, liquidation involves marshalling all available property, turning it into cash and then distributing proceeds among creditors (with fixed security taking precedence over floating charges); winding-up or receivership are other names for it in Australia. Bankruptcy involves court proceedings and the appointment of a liquidator.
Negotiating with Creditors
Representing creditors in business bankruptcies and non-bankruptcy workouts offers attorneys and law firms attractive opportunities. Representing these creditors provides the chance to develop bankruptcy and insolvency law expertise before undertaking larger engagements.
Commercial bankruptcy lawyers understand how to negotiate with creditors to reach an affordable debt settlement. Negotiations require both strategy and empathy as creditors often fear they won’t receive all their owed funds, and creditors also may have financial incentives for accepting less due since debt forgiveness could lead to tax implications for them.
A bankruptcy attorney can also help you deal with foreclosures and repossessions of vehicles or equipment if they are necessary. They can also advise you on how to reclaim personal property that has been seized by the police or the IRS, as well as protect your home and other real estate from seizure. Finally, a bankruptcy attorney can assist with the negotiation of leases and contracts and can help you negotiate for more favourable terms with your creditors. While many of these services can be handled by a paralegal, the expertise and experience of a commercial bankruptcy lawyer are critical to your success. It is important to retain a bankruptcy attorney as soon as possible after you begin to struggle with debt in order to ensure that your rights are protected. Contact a qualified bankruptcy attorney in White Plains to discuss your situation. They can help you find the best course of action to take in your unique situation and guide you through this difficult process. A good bankruptcy attorney will make it as painless as possible for you.