New Jersey Chapter 7 Business Bankruptcy Lawyer

It is important to understand that there are two different kinds of Chapter 7 Bankruptcy cases which may assist business owners:

• A Chapter 7 Personal Bankruptcy which would be filed by the business owner individually to address their personal obligations on debt.
• A Chapter 7 Bankruptcy to be filed by the business entity – Corporation, , or General Partnership.

HOW CAN A CHAPTER 7 PERSONAL BANKRUPTCY HELP A BUSINESS AND ITS OWNERS?

In our experience representing Small Business owners since 1981, we have found that much of the debt which drives them to seek the assistance of an experienced business bankruptcy attorney is actually debt which they owe personally and not “business debt” – meaning debt owed by the corporation or . In such cases, a Chapter 7 or Chapter 13 personal bankruptcy may be available to address the debt obligations and revive the businesses chances to succeed. Or, if the harsh realities of today’s economy has forced a small business to closed, a Chapter 7 or Chapter 13 personal bankruptcy may be required to allow the business owner to have a fresh start when faced with significant debt.

CHAPTER 7 BUSINESS BANKRUPTCY

Business entities – meaning the corporation or as opposed to the individual owner – are also entitled to file a Chapter 7 bankruptcy. We find that this is one of the most misunderstood forms of bankruptcy as it is often confused with a personal Chapter 7 Bankruptcy filed by the individual owner. A Chapter 7 Business Bankruptcy is one option available to a business whose debts may force it to close.

When we are retained to represent a Small Business and/or its owners, we review all options available to address the debt issues. For Small Businesses which have temporary debt issues which can be solved through a reorganization, we consider a Chapter 11 Bankruptcy for the business or other options to restructure debt and allow the business to survive. Our goal is to provide our Small Business clients with all of their options when faced with debt issues.

Some things to consider about a Chapter 7 Business Bankruptcy in New Jersey:

• A Corporation or cannot be discharged of any debt in a Chapter 7 bankruptcy case. So a Chapter 7 Business Bankruptcy is usually not a good solution for businesses which intend to operate after the bankruptcy filing or for those seeking to reduce or restructure their business debt.
• In a Chapter 7 Business Bankruptcy, a Trustee is appointed to liquidate any remaining assets and allow the Business to close debt free. After the bankruptcy petition is filed, the Chapter 7 Trustee will be responsible for the assets of the corporation. The Trustee may require that any assets of the corporation be turned over to the Trustee and liquidated to pay debts. Also, the Trustee reviews recently sold assets or transfers of corporate assets.
• After a Chapter 7 Business Bankruptcy is filed, an “automatic stay” goes into effect that stops creditors from taking any further action to try to collect their debts unless or until the bankruptcy court decides to the contrary. The automatic stay is an injunction that is issued against all creditors immediately upon filing a bankruptcy petition. The “automatic stay” does not stop any creditor from proceeding against an individual who signs a personal guarantee on a debt with the corporation.
• Prior to the filing of the Petition, the Corporation or will be required to hold a meeting and enter a resolution to file bankruptcy. Thus, it is important that all those with a voting interest in the business review with an experienced attorney the aspects of any Bankruptcy fling.

Call a New Jersey Chapter 7 Business Bankruptcy Attorney for Guidance

DON’T DELAY: The single best advice that we can provide any Small Business and its owner(s) is to immediately consult with an attorney experienced in small business debt issues to know your rights, options, and to be able to make the best decisions. Your creditors have attorneys. Small business owners need one too.

The information set forth above is not legal advice which can be provided to you only after a full review and evaluation by an attorney of your particular circumstances and the remedies which may be available.