The United States Courts reported that between October 2017 to December 2017 there were approximately 176,728 non-business related bankruptcy court cases. In the same time business related bankruptcies only amounted to 5,727 court cases. Statistically, you are more likely to file for bankruptcy than a business, enterprise, or municipality. These statistics also indicate that most individuals filing for bankruptcy are doing so through Chapter 7 more so than Chapter 13, however, both chapters demonstrate a significantly high number of applicants. When you are choosing an attorney to handle your bankruptcy case, you would want someone specialized in the laws that apply to you. Attorneys may choose to work exclusively with individual consumers while others choose to work with bigger corporations and businesses. Depending on your case, you will want an attorney that has the ability to apply the specific laws that guide each area of bankruptcy law.
Chapter 13 and Chapter 7 are the most common options for individuals looking to settle their debts. Either option allows individuals to discharge a portion or all of their debt. If you are an individual you may want to speak with an attorney that handles consumer bankruptcy cases. On the other hand, businesses, corporations, and partnerships tend to work mostly with business bankruptcy attorneys who are capable of applying the laws that fit their business type. Businesses are capable of filing through Chapter 7, Chapter 11, Chapter 13. The same chapters have different jurisdiction depending on the entity that is applying for bankruptcy. Choosing the right attorney will allow you to better understand the laws that apply to your case.
The debtor needs to consider many factors when filing for bankruptcy including his or her assets, properties, types of debts, and renewable income. Some individuals have much to lose in a bankruptcy Chapter 7, a clear assessment of their situation and an understanding of the law would allow them to choose a bankruptcy chapter that would allow them to keep their property. The debtor's situation is unique, some may qualify for a Chapter 13 bankruptcy while others may only find a remedy through a Chapter 7. If you have property, you should contact an attorney who could provide options on how to keep the most of your assets and properties.
Choosing the right attorney requires a quick self-assessment:
- Are you a business owner?
- Are you a business owner filing independently?
- Are you a single or married person?
- Do you have assets and property?
- Do you want to keep your assets and property?
- Do you have a renewable source of income?
Answers to the questions above will help you choose what attorney is right for you. In general, attorneys will either focus on commercial bankruptcy laws and procedures while others may choose to focus exclusively on consumer bankruptcy laws. Commercial and consumer bankruptcy laws are different enough that attorneys choose to specialize in one set of laws over the other. The following section will provide some guidance on how to choose the attorney that is right for you. Regardless of your situation, you are always welcomed to speak with an attorney so that you are provided with a clearer understanding of your case. The San Diego Bankruptcy Attorneys can be reached at 619-488-6168. We are ready to provide guidance on your case so that you file the appropriate bankruptcy chapter.
Single or Married People
Married people can choose to file for bankruptcy as a single entity or may choose to file separately. If you choose to file with your partner or on your own, you are advised to contact an attorney who is capable of guiding your case through the bankruptcy code. Individuals filing for either Chapter 7 or Chapter 13 will find that consumer attorneys may suit their case best as they are more in contact with consumer laws rather than commercial bankruptcy laws.
Individuals may also choose to file a Chapter 7 on their own, however, it is not advisable for individuals with properties and assets. Debtors who choose to file on their own are capable of doing so because they either owe so much money that a liquidation of their properties is their only option or because they have no property and not much to lose. Chapter 7 is right for individuals who have no problem giving up their property to pay off their debts. Individuals who have properties, assets, and a renewable income, may find that a bankruptcy will allow them to keep their property and may improve their credit at the same time. Some individuals accumulate debt that cannot be paid off in ten years while at the same time having home investments and other properties. Individuals with properties would find that a Chapter 13 may work best for their situation, however, a Chapter 13 filing process can be a bit more complicated than a Chapter 7. The individual looking to keep their property through a Chapter 13 will need to disclose their financial affairs and provide a repayment program that the creditors and judge can agree on. The San Diego Bankruptcy Attorneys can assist you with the filing process and are capable of representing your case in a courtroom or in a creditors meeting.
Small Business and Consumer Bankruptcy Attorneys
Businesses can find financial relief through Chapter 7, Chapter 11, and Chapter 13. The structure of your business will highly influence how you choose to file for bankruptcy. For example, if you are a small business owner you are capable of working with a ‘consumer bankruptcy’ attorney. Small business owners tend to be sole proprietors of their business. This means that the debt the business accumulates will be under the business owners name and therefore any debts that are unpaid become the responsibility of the business owner. When business owners own 100% of their company they are capable of filing a personal bankruptcy and capable of working with a consumer bankruptcy attorney.
When small business owners file for Chapter 7, the business owner is agreeing to have their property transferred to a court-appointed trustee. However, a small business owner filing as the sole proprietor will be capable of keeping their exempt property. Exempt property can include the debtors working vehicle, tools, and other properties that will allow the small business owner to continue working. The exempt laws that guide the bankruptcy code are specific to state law. Speak with a local attorney who will be capable of providing a clear depiction of the exempt property a small business owner can keep when filing a Chapter 7.
Small business owners will be capable of maintaining their property and having their debts discharged through Chapter 7 or Chapter 13. Once the debt is discharged, the small business owner will be protected by automatic stay laws that prevent any future debt collecting activity.
Small Business Owners Chapter 11 and Chapter 13
Small business owners can also file through Chapter 13 or Chapter 11 bankruptcy. Anyone including a business, corporation or an LLC can file a Chapter 11, however, the process tends to be longer and is more geared towards big business and corporations. Small business owners may file through Chapter 13 if they are eligible. Under current law, you may file a Chapter 13 if you owe unsecured debts less than $394,725 and secured debts under $1,184,200. When you file for Chapter 13 you are filing as an individual, not as a company. Big companies and LLC are not eligible to file for Chapter 13 relief.
The advantage of being a small business owner is that you may own a business that is still running but unable to keep up with debts. When the sole proprietor files for a Chapter 13 or Chapter 11 bankruptcy they are basically filling to have their debts reorganized. Under Chapter 13 and Chapter 11 a small business owner is capable of keeping all of their assets giving them the option to sell off any asset that is not essential for running the business. The sole business owners are also capable of having some of their debts discharged while establishing a creditor repayment program. The repayment program will typically allow small business owners to pay back their debt in a settlement plan that can span two to five years.
When filing as a sole proprietor you may find it more convenient to work with an attorney who is familiar with the consumer side of bankruptcy. In a bankruptcy court of law, the small business owner will have the rights of people filing as single entities. The San Diego Bankruptcy Attorneys use the bankruptcy laws to help small business owners retain as much of their property as possible after they have filed for bankruptcy.
Big Businesses, Partnerships, Corporations and Commercial Bankruptcy Attorneys
Big businesses, partnerships, and corporations may find a commercial bankruptcy attorney more appropriate for their case. Businesses that are not owned by a single person are capable of working with commercial bankruptcy attorneys who can guide their case through Chapter 7 or Chapter 11. Commercial attorneys are capable of findings a repayment plan under Chapter 11 that will allow big businesses or corporations to resettle their debt. Unlike consumer attorneys, commercial attorneys must be capable of evaluating and scheduling the assets and properties of more complex entities like corporations, businesses, or partnerships. Due to the complexity of assets and properties that exists in a big business, commercial attorneys must be able to carefully analyze complex financial affairs to produce a repayment program that will be accepted by the judge, creditors, and stockholders.
Complex entities that choose to file a Chapter 7, will take on different sets of laws that apply to business and partnerships. When a corporation files for Chapter 7, the whole company is transferred to a court-appointed trustee. The trustee in a Chapter 7 business bankruptcy will take full control of the business, the business will stop operating and the trustee will be in charge of selling all assets and properties. Unlike a Chapter 7 personal bankruptcy, complex entities will not be able to exempt any property that the business owns. The trustee will sell all of the assets and distribute the earnings to the business creditors. The business will then be freed of any financial obligations after it is completely liquidated.
Individuals such as CEO’s and CFO’s and other higher management personnel may be responsible for paying back business debt if they are personally liable for the debts. If that is the case, the individual would have to file a separate personal bankruptcy if he or she cannot pay the debt off.
A business liquidation may not be for every business. If your business is up and running, but you have overhanging debt, the business may qualify for a Chapter 11 business bankruptcy. In Chapter 11, businesses and corporations will have the opportunity to have their debt resettled and have the protections of automatic stay after they have filed for bankruptcy. By resettling the debt through a repayment program, the company will continue to function with the oversight of a court-appointed trustee. Some businesses may find that a Chapter 11 is more appropriate for their economic affairs.
Business or commercial attorneys will have a much easier time explaining the specific laws that guide corporations or partnerships. If you are business with substantial debt, but you have the capability and will to keep on going, you may find some remedy through a Chapter 11 debt reorganization plan.
The San Diego Bankruptcy Attorneys are capable of representing complex entities or single individuals in a court of law and in the creditors and stockholders meetings. Our specialized team has extensive experience in bankruptcy law, allowing indebted entities the opportunity to have a fresh start. Working with the right attorney is crucial in a bankruptcy case, you need someone you can trust and someone who is capable of representing your case so that your bankruptcy petition is accepted. Our attorneys are capable of filing your case and representing your case in a courtroom so that you receive immediate protection and financial relief. To reach the San Diego Bankruptcy Attorneys you may contact us at 619-488-6168 or you may visit our offices at 750 B Street, Suite 2510, San Diego, CA 92101.