What are Some Non-Bankruptcy Alternative Solutions?
Once we make your creditors aware that you may be forced to either close your business or file for relief under The Federal Bankruptcy Code, your creditors may be willing to negotiate a workable plan for the following reasons:
- They know you’re serious because you have retained an attorney.
- They would rather negotiate a plan that has a good chance of working rather than possibly receiving nothing.
What Might Such a Plan Look Like?
1) There would be a period of forbearance of payment based on a revised business plan.
2) Reduced monthly payments after the forbearance period.
3) A cash settlement on a reduced negotiated balance, either with a one-time lump sum payment or a reduced sum with payments made over several months or years.
4) If your creditors are important suppliers of product for your business often we can arrange for your business to continue to receive shipments on a COD basis and deal with your past obligations at a later date.
If there are no non-bankruptcy options, here are answers to some common questions about the difference between a Chapter 7 and a Chapter 13.
- Chapter 7
If qualified, you are allowed to discharge your debt (in other words, the debt is completely eliminated). This is for the debtor who cannot pay his or her debts even if given time. The debtor will be allowed to retain all assets such as a car or home.
- Chapter 13
If qualified, you will enroll in a payment plan with your creditors, generally over a 5 year period, paying little or no interest on your unsecured debt such as credit card or medical bills. Based on the facts in each case, the amount paid the creditors can vary from as little as 10% to 100% of the entire debt.
- Can I still own a Home if I file a Chapter 7 or a Chapter 13?
It will depend both on the amount of equity in the real estate as well as how the title is held. Our job is to analyze your situation to make certain your home is not put in jeopardy and that the filing of a Chapter 7 or a Chapter 13 will still allow you to stay in your home while dealing with your debt.
- Can I file a case and save my Home if I am behind on my monthly payments or in Foreclosure?
Yes, in fact a Chapter 13 has helped countless individuals keep their home. A payment plan is established to deal with what is owed while you continue to make your regular monthly mortgage payments.
