Corporate Bankruptcy in Grand Rapids, Western Michigan
Financial reorganization under bankruptcy is a complicated process, but it is sometimes the best solution to regain control of a company's finances. The attorneys of Keller & Almassian, PLC are dedicated to helping businesses and individuals get back to financial health. Here are three common questions that we receive that could help businesses get back on track.
1. What Is Corporate Bankruptcy?
Corporate bankruptcy occurs when an operating business has a higher than normal debt-to-profit ratio. There are two bankruptcy options that a company can experience:
- Chapter 7
- Chapter 11
The purpose of Chapter 11 bankruptcy is to reorganize a company's debts so that it may continue long-term operations, or conduct a court-ordered sale of the company or its assets.
2. Is My Business Eligible?
Each tier of bankruptcy has its own requirements. Below is a description of each type of bankruptcy:
- Chapter 7
A Chapter 7 bankruptcy is used when a company's debt exceeds its assets, its cash flow is insufficient to continue operations, and its owners desire to close the business.
Uniquely in Chapter 7, companies are not eligible for a discharge. It is imperative to seek lawyers who understand the distinctions between personal bankruptcy and corporate bankruptcy, and are aware of successor liability issues.
- Chapter 11
The eligibility requirements for a Chapter 11 bankruptcy are a little more relaxed. Any business or sole proprietorship can file to reorganize their financial structure and assets. This is called a Chapter 11 bankruptcy protection and was designed to permit companies to reorganize their businesses for profitability. Although a sole proprietor can file Chapter 11, there are some stipulations. As of April 1, 2016, an individual can only file Chapter 11 if their debt exceeds $394,725.
3. What Are My Options?
Your options are not limited. We will meet with you to assess your company's debts, assets, cash flow projections, and your goals. This will allow our attorneys to determine whether corporate bankruptcy or non-bankruptcy options fit your needs.
Contact Us For A Risk-Free Assessment
Financial difficulties cannot always be avoided. When faced with corporate bankruptcy, the attorneys at Keller & Almassian are ready to assist you in taking the next step to helping your business. Contact us today to receive a risk-free assessment of your business.