Businesses experiencing financial problems typically try a number of strategies to minimize costs and enhance sales. If these strategies ultimately prove unsuccessful, businesses have two options in bankruptcy - the business can declare bankruptcy under Chapter 7 (liquidation bankruptcy) or under Chapter 11 (debt reorganization).
Business Bankruptcy Options in San Diego & Orange County
Before you make a decision to file for business bankruptcy under one of these chapters of the bankruptcy code, let an experienced Orange County or San Diego business bankruptcy attorney review your financial situation. The bankruptcy attorneys at Boyd Contreras APC, can advise you if there are additional steps you can take to avoid bankruptcy or if the time is right to file for Chapter 7 or Chapter 11.
If bankruptcy will help you and/or your business, we will guide you through the process, filing your paperwork and serving as your legal advocates throughout your case.
Chapter 7 Bankruptcy vs Chapter 11 Bankruptcy
- Chapter 11 Reorganization: If you want to continue in business and believe you can continue to do so if significant changes are made, you may choose Chapter 11. A trustee of the bankruptcy court will appoint one or more committees to work with you and your lawyer to develop a reorganization plan to repay some debt and discharge other debt. The one committee that will always be formed is the committee of unsecured creditors. Sometimes a stockholder committee, a secured creditor committee, and employee committee or bondholder committee will be appointed.
When a plan is completed, your San Diego bankruptcy reorganization attorney will prepare a disclosure statement and file it with the court. Creditors - and other parties - will have an opportunity to vote on the plan, though the bankruptcy court can disregard that vote and confirm the plan if the court believes the plan is fair to creditors and stockholders.
Once the bankruptcy court has confirmed the plan, the company can then carry it out while it continues to do business. While the company and its managers continue to handle all day-to-day operations, any significant business decisions must be approved by the court.
- Chapter 7 Liquidation: Companies that choose Chapter 7 bankruptcy are stopping operations and going out of business. A trustee is appointed by the bankruptcy court to sell the company's assets and the money is used to pay debt. Secured creditors will have their collateral returned to them. Unsecured creditors and bondholders are notified of the Chapter 7 filing and need to file a claim against any money remaining after secured creditors are paid.
Contact a Bankruptcy Reorganization Attorney
Our attorneys help clients through out Southern California including these cities and counties:
- San Diego County
- Chula Vista
- El Cajon
- La Mesa
- La Jolla
- Orange County
- Santa Ana
- Newport Beach
- Laguna Beach
- And More
To learn more about business options in bankruptcy, contact us online or call our office at 619-378-4033 to schedule a free confidential consultation at our San Diego or Orange County, California, law office.
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Pursuant to 11 U.S.C. section 528(a)(4) of the bankruptcy code, we are required to state: we are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.