You’ve worked hard but your liabilities exceed income, inventory and receivables, and the future of your business is in doubt. The Law Office of Timothy G. Cook in Marietta, Georgia can help you decide if you should file for Chapter 11 reorganization or liquidate the business under Chapter 7.
Since 1997, I have helped many small companies in the North Atlanta Metro area file for protection from creditors and relief from debts, through business bankruptcy. As a sole practitioner and an experienced Georgia small business bankruptcy attorney, I am well versed in the issues facing my clients as well as the intricacies of U.S. bankruptcy law. With my background in corporate accounting, I can advise you as to your best course of action.
Chapter 11: Can the Business Be Saved?
If you believe that your business can be revived and benefit from a short-term reprieve from creditors, Chapter 11 bankruptcy may make sense. I have a business accounting background and can review cash flow, asset-to-debt ratios and other factors to advise you on whether to file for Chapter 11 reorganization.
A Chapter 11 is similar to a Chapter 13 filing for individuals. Acting as your own trustee, you (and your attorney) negotiate with creditors to accept a certain percentage of your debts and pay down the debts over 3 to 5 years. I represent many sole proprietors, limited liability companies, partnerships and churches throughout the Atlanta area. Many clients have emerged from bankruptcy to thrive again.
Chapter 7: Liquidation of Assets
In a Chapter 7 filing, a determination is made that the business cannot be salvaged. Amassed debts are too high, or projected income has fallen off for various reasons. I can help you make the determination to continue on or fold the operation. The majority of owners do not have the expertise or they are so overwhelmed by trying to keep the business going they cannot see an answer.
In filing for Chapter 7 business bankruptcy, a trustee takes over the inventory and assets of the company. The trustee then pays each creditor a proportionate amount of the liquidated proceeds from the sale of the assets of the business.
If you are considering filing under Chapter 7, I can advise you about practices that will allow you to walk away with the minimum amount of personal liability and help you avoid mistakes. For instance, transfers of assets to others within the company or related to you (if not properly done) can be recalled into the bankruptcy estate. Another common scenario is using money set aside for employer taxes to meet payroll and purchase expenses — leaving the owner(s) and management personally liable with a considerable tax debt that cannot be discharged in the business bankruptcy.
For a free initial consultation and full explanation of Chapter 7 or Chapter 11, contact a small business bankruptcy attorney who knows the law and the business community of North Atlanta.