Every business must recognize the risks of corporate financial distress and bankruptcy and be prepared for the unthinkable.
While there are obvious downsides to choosing this path, a Chapter 11 or Chapter 7 bankruptcy corporation discharge may be the right strategy in certain situations.
Advantages of Corporate Bankruptcy Chapter 11
A Chapter 11 bankruptcy is typically filed by large corporation as the process is usually longer and more complex.
However, a key advantage of corporate bankruptcy Chapter 11 is that you get the first right to propose a debt reorganization plan. If the court accepts your plan, the process moves forward.
As the debtor who is filing a Chapter 11 petition, you will benefit from an automatic stay on any foreclosures, lawsuits, wage garnishments, bank levies, and such other activities. If you are facing aggressive creditor action for collection, an automatic injunction can be very helpful and serve as the first step in debt reorganization.
Recovery and Avoidance of Actions
Once you are in Chapter 11 bankruptcy protection, you can avoid and recover some wage garnishments, bank levies, and even repossession of equipment or vehicles that may have occurred before you filed for bankruptcy.
Preservation of Business
Your business as a going concern can continue to operate in a Chapter 11 corporate bankruptcy. This means your business, your customer, supplier, and investor base can be preserved.
Advantages of Corporate Bankruptcy Chapter 7
This is the more common form of corporate bankruptcy because the legal process, from filing to relief, can be completed in just a few months, and it may offer the much-needed relief along with a roadmap to restore your financial condition.
Exemptions under Florida bankruptcy laws could ensure that many of your assets will not be affected by bankruptcy. In addition, you will get to keep the wages or salary you are earning as well as any property you may purchase after filing for bankruptcy protection.
Although Chapter 7 bankruptcy corporate discharge will hurt your credit, you could be in a position to obtain fresh credit in as little as one year after filing bankruptcy.
A variety of financial obligations can be alleviated by the bankruptcy court when you file for Chapter 7. (However, for suspension of child and spousal support obligations in a divorce, you have to petition the family court.)
A Chapter 7 bankruptcy will stop your lenders from pursuing aggressive action for collection. So, you will have significant relief to reset your financial life when the stressful calls and letters for collection come to an end.
As long as you do not owe money on the debts that survive Chapter 7 bankruptcy, the number and amount of debts that a Florida bankruptcy court can relieve you from paying has practically no limits. Irrespective of the amount of debts you may have, you are allowed to file Chapter 7 for relief.
Choose the Right Attorney to Guide You Through Corporate Bankruptcy Process
To make the right decisions about your corporate bankruptcy in Florida, make sure you have an experienced bankruptcy lawyer on your side. Trust the Lawyer of the Decade and the Largest Bankruptcy Firm in Florida! Call Patrick L. Cordero Law Offices today at 305-445-4855 or contact us online for a free consultation.