Consumer Lawyer New London, CT
Is your Connecticut business struggling and being sued by creditors for failure to meet your financial obligations? If your business cannot pay the debts or obligations that are owed, you may want to consider commercial bankruptcy protection. This is a process that will allow you to get out from under your debts. However, there are some financial risks and pros and cons that should be considered before going down this route. Speaking with a consumer lawyer in New London, CT can help you decide what course of action is best for your business.
Types of Bankruptcy Options
There are several different options you can petition the court for depending on your circumstances. The first is Chapter 7, which is essentially a liquidation, and it would discharge obligations and debts that you cannot pay. Chapter 11 would help your business suspend some obligations on a temporary basis while working on a reorganization plan.
The main difference between these two options is that Chapter 7 would let you start over with a new business that is free of obligations and debts from your original business, which will be closed at the end of the bankruptcy process. With Chapter 11, you would be trying to hold on to your business while taking steps to stop the downward spiral.
Sole Proprietorships – Chapter 13
As a New London, CT consumer lawyer can explain, there is another option for some businesses — Chapter 13 bankruptcy is a type of reorganization bankruptcy that is usually available only for individual consumers. However, it can also be used for sole proprietorships. This would involve filing a repayment plan with the court that would offer details on how you plan to repay your debts.
Potential Positive Effects of Bankruptcy
If you are in a situation where bankruptcy seems like an inevitable result, there can be some potential upsides to proceeding down this path. Depending on your situation, some of these can include:
- Renegotiation of Contracts: Under a Chapter 11 reorganization, you can end current contracts and renegotiate more favorable ones. Some vendors are more amenable to renegotiating terms, because it means your business will continue operating, allowing them to recoup some of the debts.
- A Potential Competitive Advantage: The opportunity to temporarily halt your debts and obligations, pay only a portion of existing debts, and dismiss existing contracts can make you more efficient than some of your competitors, who are still required to meet their debts and obligations. In some cases, Chapter 11 may be able to give your business an advantage in the marketplace.
- Extra Time to Complete Your Reorganization: When your company gets a temporary break, it gives you a much-needed breather to get back on your feet. Businesses that could not otherwise stay afloat may even be able to turn the company completely around during this reprieve.
What Everyone Should Know About Filing for Bankruptcy
Life throws curveballs. When unexpected events occur, there’s the chance of falling into endless debt. Bankruptcy is an option when creditors refuse to stop calling. Many in this situation, though, are hesitant to act. They have misconceptions about what it means to declare bankruptcy that dissuade them from taking action. Those from Connecticut with out-of-control debt should consult a consumer lawyer in New London, CT. The professional they speak with is bound to inform them of the following.
You Can Still Get Credit
Consumers often believe that declaring bankruptcy means they will never again qualify for credit. In reality, they can start rebuilding their credit almost immediately. Major purchases, such as vehicles and homes, are possible within a few short months. Credit cards are also a possibility. The bankruptcy attorneys at Eric Lindh Foster Law, LLC can assist in postbankruptcy dealings with creditors.
You Will Not Go to Jail
It’s commonly assumed that time behind bars is possible because of going bankrupt. Modern society has long since done away with debtor’s prison. Millions of citizens file for bankruptcy every year. Our penal system understands these are merely hardworking individuals who are experiencing difficulties. A consumer lawyer in New London, CT, is sure to provide reassurance that they won’t end up in the clink.
You Should Not Expect To Experience Trouble Filing
Filing for bankruptcy used to be much more difficult. Today, paperwork can be completed and submitted electronically from anywhere. All you need to provide is:
- An intake form
- Three months of bank statements
- Two years of tax returns
- A list of debts
- Paystubs for the last half a year
- Property values
Once the information has been handed over, the workers at Eric Lindh Foster Law, LLC can take care of the rest.
You May File for Bankruptcy Multiple Times
Some believe they’re only entitled to one bankruptcy. In reality, filing multiple times is entirely possible. All that’s needed is to have one’s record expunged. If someone has previously filed for Chapter 7, expunging is possible once eight years have passed. For those with Chapter 13 bankruptcies, the wait is only two years. Regarding citizens who’ve had their cases dismissed, there is usually no waiting period whatsoever.
You Are Likely To Qualify
New laws in 2005 provided an opportunity for creditors to sow confusion. They began convincing the public that bankruptcy was now only possible under tight circumstances. While the Means Test that approves people for bankruptcy changed, it did not tighten its difficulty. In reality, bankruptcies have increased since that time. Those with significant debt should ask a consumer lawyer in New London, CT, about their bankruptcy qualifications.
Contact Our Office
At Eric Lindh Foster Law, LLC, we understand how difficult the process of commercial bankruptcy can be. You need a firm that has extensive commercial litigation and transactional law experience. Our attorneys have years of experience in both areas, and we can provide top-notch representation as you decide how best to move forward. Call our office today to meet with a New London, CT consumer lawyer and find out what legal options you may have.