Friday, August 1, 2014

Bankruptcy Attorneys In Los Angeles County: The Professional Approach To Business Failure

Bankruptcy Attorneys In Los Angeles County: The Professional Approach To Business Failure

By Judie Vivien Pullido


Starting a business is one of the most exciting economic activities, and for many people it represents the independence of self-employment and the possibility of unlimited financial returns. However, if the business fails, there are legal processes which need to be followed in addressing its debts, and bankruptcy attorneys in Los Angeles County can assist.

Californian law provides certain options to the owners of companies which are no longer financially sustainable. If this has happened to your business, you should consult with liquidation attorneys in order to determine the most suitable course of action.

There is the Chapter 7 procedure (liquidation), which applies in cases where the bankrupt party is genuinely able to show the court that payment of their debts is impossible in the next 3-5 years. These debts then become invalid. This order is not allowed, however, pertaining to alimony, child support, study loans and some types of tax. It can also only be instituted once every 8 years.

If the debtor is able to pay the debts in the next three to five years, however, they may apply for Chapter 13. This option entails partial or total repayment of debts, based on the available income and assets of the debtor. It is useful if the debtor desires to retain ownership of their residential or other property.

If the business is able to continue profitable operations, they may opt for Chapter 11. This order permits continued operation, as long as the creditors of the business have accepted a repayment plan. The Chapter 11 option is therefore only available to companies who are able to proceed with ordinary operations and have not shut down completely.

Bankruptcy represents the ultimate failure of a business. It almost always implies the loss of money and a sour investment. Even so, it can be made less traumatic by professional legal assistance.




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