Business Bankruptcy Attorneys

Depending on who's filing, business bankruptcy attorneys can be friends or foes. Lawyers play important roles on both sides of Chapter 11 cases; and debtor and creditor are equally entitled to expert legal representation. Each party comes to the table with specific goals and objectives; but it's up to the lawyers to persuade the judge and plead the client's case. In a Chapter 11 petition, the debtor attorney's main goal is to protect debtor assets; while the creditors' lawyers seek to get as many secured and unsecured claims paid as possible. Chapter 11, or business reorganization, requires the debtor in possession to submit to the court a viable plan to restructure company management for greater profitability. But the plan has to be approved by creditors, who have the right to reject proposed restructuring and engage in adversarial proceedings. Attorneys are there to present, contest and advocate opposing views of debtors and creditors.

The bankruptcy courtroom is much like a boxing ring: the debtor is in one corner and the creditor, or creditor committee, is in the other. The stakes may be high. After all, the debtor's business is on the line and creditors want to be compensated. Like a seasoned trainer who knows all the tricks of professional boxing, attorneys are on hand to provide expert blow-by-blow instruction on how to win. Good business bankruptcy lawyers plead the debtor's case, citing heavyweight reasons why the client should be granted the right to continue operating a financially-troubled company. Part of the burden of proving the debtor's ability to pay creditors under reorganized management also rests firmly on the attorney's shoulders. Presenting the debtor's case before trustees, creditor committees, and the judge requires mental dexterity and a determination to win. Business bankruptcy lawyers hired by creditors may be equally formidable in contending for client's rights to receive payment and restitution for unpaid debts. A creditor's lawyer doesn't want to have a claim dismissed or thrown out because of a technicality. Creditor lawyers are prepared to go to the tenth round to ensure a knockout victory and get debts discharged. As debtor and creditor trade blows, the bankruptcy court judge is there to referee the proceedings, ensuring that neither contender throws a punch below the belt.

Debtors and creditors should choose business bankruptcy attorneys who are knowledgeable about corporate law, specialize in Chapter 11 filings, and have a good track record of successful discharges and satisfied clients. Attorneys help debtors in possession file Chapter 11 reorganization plans with the local court. A Chapter 13 proceeding requires a trustee to perform an accurate accounting of debtor assets, examine and determine the validity of creditor claims, and file reports; however Chapter 11 debtors can act as self-appointed trustees. They are responsible for accurately tabulating assets, reporting secured and unsecured creditors, and filing monthly operating reports of the failing enterprise. Business bankruptcy attorneys can provide invaluable oversight, legal advice, and assistance in expediting debtor findings.

Whether the company is a sole proprietorship with an individual owner; a corporation with multiple invested owners or shareholders; or a partnership with two to three owners; the business bankruptcy lawyer will work to ensure that all debtor assets are protected, with the exception of those that are non-exempt. Under Chapter 11, personal assets of corporate shareholders are not at risk. Shareholders' risks are limited to the amount of capital invested in the corporation. However, a sole proprietor's business and personal assets may be in jeopardy, unless a homestead exemption is filed. Bankruptcy law makes provision for debtors to retain personal exempt property and still honor obligations to creditors. In Old Testament Biblical times, individuals would give, or pledge, to creditors a personal garment as collateral for borrowed monies. Mosaic law required that the item be returned by that evening: "If thou at all take thy neighbour's raiment to pledge, thou shalt deliver it unto him by that the sun goeth down. For that is his covering only, it is his raiment for his skin wherein shall he sleep? And it shall come to pass, when he crieth unto me, that I will hear; for I am gracious." (Exodus 22:26-27) Experienced business bankruptcy attorneys can provide legal counsel to help protect debtors' personal resources while ensuring creditor demands are legally met.

Creditors' lawyers also advise them regarding legal rights and obligations, including cessation of collection efforts upon receipt of the debtor's notice of bankruptcy. Lawyers represent creditors at 341 hearings, held 30 days after the debtor files the Chapter 11 petition, and can help creditors file objections to the proposed reorganization plan and negotiate with the debtor's attorney. Should creditors object to the debtor's plan or treatment of claims, attorneys may conduct adversarial proceedings, lawsuits against debtor within the original Chapter 11 case.

To find experienced business bankruptcy lawyers, debtors can consult a local chapter of the American Bar Association, browse the Internet, or check out the telephone directory. Consumers should select an attorney based on prior business bankruptcy experience. Not all lawyers handle cases for corporations or partnerships. The advantage of having Internet access is that debtors and creditors can shop online for legal assistance before committing to a contractual agreement. Most business bankruptcy lawyers will offer free initial consultations and stipulate work to be performed for an hourly or flat rate fee. Consumers should not be shy about getting referrals from trade associates, family and friends. In spite of high-powered marketing and glitzy ads, satisfied customers are business bankruptcy attorneys' best advertisements.

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