In Kansas, bankruptcy claims could help a business manage their debts more amicably. These solutions provide several benefits to help the owner avoid litigation and serious financial losses. A lawyer in Lawrence, KS helps these owners find the right solution for their debt related issues.
What Are the Benefits of Chapter 7?
Chapter 7 is a form of liquidation that allows the owner to sell off key properties to settle their debts. These opportunities require a trustee to acquire and sell all properties to generate adequate proceeds. These procedures last up to six months to complete. In most cases, the owner becomes debt free at the end of the case.
How Is It Different From Chapter 11?
The primary differences are that under chapter 11 the business can continue to operate. Under chapter 7, they are required to shut down until the bankruptcy case has concluded. Chapter 11 isn’t liquidation like chapter 7. It involves strict negotiations that allow the attorney to change terms of the accounts with the creditors. This could include more conclusive loan modifications that could achieve a lower interest rate.
What Are the Requirements for Liquidation?
Liquidation requires the owner to surrender the properties to the court. Once the title is given to the court, it is no longer owned by the company. They cannot use the property and must vacate it entirely. The owner cannot reacquire the property through any connections during the bankruptcy. This includes using a different name to purchase the property.
The business must close completely and cannot start any new lines of credit. They must lay off their workers throughout the term of the case. The major drawback is that the company cannot generate any profits during the case and could incur further debts.
Kansas business needs to review the pros and cons of chapter 7 and 11 bankruptcy. An attorney presents them with this information and shows them how it could impact their company in the future. They should evaluate each option before making a final choice. Owners who need to file can hire a lawyer in Lawrence, KS through Joseph I. Wittman Attorney at Law today.