Virginia Bankruptcy Lawyers for Businesses and Individuals.
Virginia bankruptcy lawyers can assist businesses and individuals with getting a fresh start. Recent events have had unprecedented effects on our economy. Bankruptcy law exists to assist businesses to reorganize and restructure and to assist individuals to get out from under debt they can no longer sustain.
What are the different types of bankruptcy options?
Virginia bankruptcy lawyers can advise you or your business on the different options available. Generally, the advantages and disadvantages differ for individuals and businesses.
What are the types of bankruptcy options available for individuals?
For individuals, there are two types of relief that are usually used. The first is liquidation under chapter 7 of the Code. In a liquidation case, sometimes referred to as a straight bankruptcy, any substantial nonexempt assets of the debtor are converted to cash and distributed to creditors according to certain statutory rules. The individual debtor ordinarily receives a discharge, which absolves him or her from any responsibility to pay most debts and also provides various other protections.
The second type of relief is a reorganization, or adjustment, of the individual debtor’s financial affairs. Although such a reorganization may be available to individuals under both chapters 11 and 13 of the Code, chapter 13 is more beneficial for almost every consumer debtor. Although chapter 13 has become a somewhat less attractive alternative as a result of the 2005 amendments to the Bankruptcy Code, it remains less expensive and it also offers a number of protections not found in chapter 11. In a chapter 13 case, the debtor proposes a plan for payment of some or all of their debts, within certain statutory guidelines. The plan is then carried out under court supervision with the court protecting the debtor, and usually all of the debtor’s property, from creditors. At the end of the case, as in a chapter 7 case, the debtor receives a discharge from personal liability on most debts, as well as other protections.
Neither discharge by itself protects the debtor’s property from creditors with valid liens on the property. However, the Code offers a number of ways, particularly in chapter 13, for debtors to obtain full or partial relief from secured claims in most cases.
What are the types of Virginia bankruptcy options available for businesses?
Businesses may file bankruptcy under Chapter 7 to liquidate the business or Chapter 11 to reorganize the business. The objective for and future prospects of the business generally drive this decision.
A chapter 7 debtor is choosing to liquidate the assets of the business and pay creditors the proceeds of the liquidation. On the other hand, a chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.
Webster Book LLP offers a free consultation for these matters. If you would like to examine whether bankruptcy is right for you or your business, please fill out the form below or call us at 888-987-9991.