Bankruptcy law provides debtors who are overwhelmed with debt an opportunity to restructure their debt and receive a fresh start. There are many different types of bankruptcy filings, each with their own set of rules. Debtors should always seek the advice of a qualified Tampa bankruptcy attorney to help determine which chapter will be best suited for their needs. Each type of bankruptcy will have its own set of unique benefits and potential consequences.
Individual debtors typically will file for either a Chapter 7 or Chapter 13 Bankruptcy. If a debtor is interested in keeping their assets and paying their creditors then most likely they will file for Chapter 13 protection. On the other hand, if a debtor cannot afford to make the monthly payments required under Chapter 13, a Chapter 7 Bankruptcy may be more appropriate. In Chapter 7 the debtor does not make monthly payments to his creditors, rather his assets will be liquidated in order to pay back the creditors included in the bankruptcy. If the borrower is a business rather than an individual they will typically file for Chapter 11 protection. While individual debtors are permitted to file for Chapter 11 most often a Tampa bankruptcy attorney will advise individuals to file for either Chapter 7 or 13. The higher costs and fees demanded by Tampa bankruptcy lawyers typically make filing for Chapter 11 by individuals an illogical choice.
A Chapter 11 bankruptcy may provide relief to business that need to restructure their debt in order to remain a viable business. However, there are numerous consequences of filing for Chapter 11 that debtors should be aware of. For instance, a Tampa bankruptcy lawyer should always advise their client that if the business’s debts are greater than its assets the debtor may be forced to turn over all of his rights in the business. However, there are also many benefits that a Chapter 11 can offer to businesses inundated with debt. For instance, in most cases a debtor will remain in control of the business during the bankruptcy as a debtor in possession. While acting as a debtor in possession the bankruptcy petitioner may acquire new financing for the business and even cancel contracts. Another benefit is that the bankruptcy petition will enforce an automatic stay on all collection activities. The automatic stay will remain in effect throughout the bankruptcy, which may last many years.
A Chapter 11 Bankruptcy can be a very complex and time consuming process. If you are considering filing for Chapter 11 protection you should contact an experienced Tampa bankruptcy lawyer for legal help. A skilled Tampa bankruptcy attorney can advise you on the law and help manage the bankruptcy process.
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