Business Bankruptcy Attorney
Business owners establish their companies with high hopes for financial success; however, business failure is unfortunately quite common. Struggling businesses often rack up significant amounts of debt before it becomes clear that they won’t be able to continue operating. If your company owes debts it cannot pay, business bankruptcy may be your best option. Filing business bankruptcy allows you to resolve your debts while protecting as many of your assets as possible.
The business bankruptcy process can be lengthy and overwhelming – especially when you are already facing the stress of a failed company. If you are planning to file business bankruptcy, you need an experienced attorney on your side who understands the process and can help you make the best choices every step of the way. Ted Machi is Board-Certified to practice bankruptcy law, and he and his team have several years of experience helping business owners recover from their debts.
Commercial Debt Collection Laws in Texas
In the state of Texas, debtors are protected by many different laws. These laws control how and when creditors and collection agencies can collect on debts. However, many of these laws do not apply to commercial debts.
Because commercial debt collection is not subject to the same strict laws that govern consumer debt collection, creditors and collection agencies pursuing compensation for commercial debts have many more tools at their disposal and can be much more aggressive with their collection efforts. For companies that are already struggling to pay their bills and make ends meet, significant amounts of commercial debt can quickly become problematic.
For businesses in this situation, there are only a few ways to stop aggressive debt collection: the business can try to reach an agreement with the creditors, the business can pay the debt, or the business can file for bankruptcy. If the company files for bankruptcy, an “automatic stay” will stop creditors and collection agencies from continuing their efforts to recover debts from the business. Creditors and collection agencies will no longer be able to levy bank accounts, initiate foreclosure proceedings, continue with existing foreclosures, or repossess collateral once the bankruptcy paperwork has been filed. While it’s a good idea to contact the bankruptcy attorneys at Ted Machi & Associates before creditors start taking such actions, it’s vital to contact us if they’ve already begun the process of collecting on debts.
Chapter 7 Business Bankruptcy Process
Chapter 7 bankruptcy is one type of bankruptcy protection available to companies in Texas. This type of bankruptcy, which is also referred to as “liquidation,” is available to businesses that are unlikely to ever be able to repay the debts they owe or to recover from financial hardship.
If your business files Chapter 7 bankruptcy, you will turn over all of the business’s assets to a Chapter 7 trustee. The trustee will liquidate all of these assets in order to pay as much of the business’s debts as possible. At the time of the filing, you will also be required to cease all of your company’s operations.
Chapter 7 bankruptcy is available to all types of businesses. The bankruptcy process begins when you file a petition for bankruptcy with the appropriate court. It’s vital to have one of our bankruptcy attorneys help you with this complicated process.
As soon as your petition is filed, the automatic stay will go into effect and creditors must stop all of their collection efforts, including repossession and foreclosure proceedings. Your company will then be required to file a variety of paperwork that documents recent asset transfers, lawsuits, existing contracts, income, expenses, and outstanding debts. The court will appoint a trustee to handle the case, and the trustee will gather and sell all of the business’s assets. Debts that remain after the trustee has turned over all these proceeds will not be collectible from the business, as it is no longer in operation.
Company Debt Liability in Bankruptcy
In some cases, individuals may be liable for some of the company’s debts. If this is the case, declaring business bankruptcy will not take care of these debts, and these individuals may face collection actions after the business bankruptcy process is complete. If you think you may be personally liable for some of your company’s debts, you need to consult with an attorney at Ted Machi & Associates to discuss your options.
Whether you are dealing with commercial debt collection issues or you are contemplating filing bankruptcy for a failed company, having the right attorney on your side is essential. The experienced lawyers at Ted Machi & Associates understand all of these issues, and we can guide you through your options and the bankruptcy options. Contact Ted Machi & Assoc. today to learn more about your options for dealing with a failed business.