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During these tumultuous times of economic uncertainty small business bankruptcies are happening more and more. Sometimes small business firms can’t make it due to lack of funding, or a change in the market. Businesses may fail for a variety of other reasons and Business Owners may find themselves faced with deciding if bankruptcy is necessary. Bankruptcy is a process in-which the federal court is enabled to help your business eliminate or repay its debt under the protection of the bankruptcy court. Business bankruptcies are usually described as either liquidations or reorganizations depending on the type of bankruptcy that is best for you and your business.

The attorneys at Castiglia-Rubinstein & Associates are amongst the top business bankruptcy attorneys in New York.  The business bankruptcy lawyers at the Castiglia-Rubinstein Law Firm are not only trained in handling simple business bankruptcy matters, we take care of complex business bankruptcy litigation in Nassau County, New York, Suffolk County New York, Brooklyn, Kings and Queens Counties New York and, on Long Island and all New York City boroughs including Bronx, Westchester, Richmond County, and Manhattan New York.

Sole Proprietor or DBA Bankruptcy

Depending on the form of ownership of your business; there are three different types of bankruptcy. Sole proprietorships, or a DBA (Doing Business As) are legal extensions of the owner and there is no separation between business and owner. The owner of a Sole proprietorship or DBA is responsible for all of the assets and liabilities of their business. A sole proprietorship or DBA can go bankrupt by filing for Chapter 7, Chapter 11, or Chapter 13.

A Corporation, Partnership or an LLC Bankruptcy

Corporations (S Corporation, C Corporation or a Limited Liability Company {LLC}) and partnerships are all legal entities that are separate from their owners. As such, they can file for bankruptcy protection under Chapter 7 or Chapter 11.

Business Bankruptcy – Chapter 7

Chapter 7 bankruptcy may be the best choice when the business has no present or future ability to show earnings after expenses. It is usually referred to as a total liquidation. Chapter 7 Bankruptcy is used when the debts of the business are so overwhelming that restructuring them is not practical. Chapter 7 is also appropriate when the business does not have any substantial assets. More often than not Chapter 7 bankruptcy usually means that the business is over and will cease to exist.

In Chapter 7 bankruptcy, a trustee is appointed by the bankruptcy court to take possession of the remaining assets of the business and distribute them among the creditors. After the assets are distributed and the trustee is paid, a sole proprietor receives a “discharge” at the end of the case.

A discharge means that the owner of the business is released from any obligation for the debts. Partnerships and corporations do not receive a discharge.

Business Reorganization – Chapter 11

Chapter 11 is the better choice for a business that may have a future ability to retain earnings after expenses. The Chapter 11 Bankruptcy is a plan where a company reorganizes itself and continues on in normal active income earning business activities. It is reorganized under a court-appointed trustee. The owner of the company may actually be the trustee. The company files a plan of reorganization outlining how it will deal with its creditors. Creditors vote on the plan. If the court finds the plan is fair and equitable, they will approve the plan. Reorganization plans provide for payments to creditors over some period of time which may exceed twenty years. Chapter 11 bankruptcies are very complex and not all Chapter 11 bankruptcy plans succeed. It takes a very qualified bankruptcy attorney to work out these types of plans.  A Chapter 11 Bankruptcy can take over a 1 year just to have your plan confirmed.

Personal Bankruptcy – Chapter 13

Chapter 13 bankruptcy is a reorganization bankruptcy typically reserved for consumers, though it can be used for sole proprietor business owner.

You file a repayment plan with the bankruptcy court detailing how you are going to repay your debts. The amount you will have to repay depends on how much you earn, how much you owe, and how much property you own. If your personal assets are involved with your business assets, as they can be if you own a sole proprietorship, you can avoid the danger of losing your home if you file Chapter 13 versus Chapter 7.

We are dedicated to your success and your future success in your business — so contact us. Speak with one of our knowledgeable Long Island business bankruptcy attorneys, business bankruptcy litigation attorneys, chapter 7 business bankruptcy attorneys, chapter 13 business bankruptcy, chapter 11 business bankruptcy attorneys today from wherever you are in New York in Nassau and Suffolk, Brooklyn, Kings and Queens Counties, on Long Island and all New York City boroughs including Bronx, Westchester, Richmond County, and Manhattan.

Call 800-960-1529 today.

Get Help With Your Business Bankruptcy Now

You should be prepared if you are experiencing personal or business financial problems. You should know you have certain legal rights and must be very selective of the Lawyer or Law Firm that you chose to represent you.
Have a Business Bankruptcy Attorney council you on the Right Decision for You,
Your Family and Your Business.

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