Filing for bankruptcy is an important decision that has significant implications for your life. But when mounting debt begins to feel unmanageable, bankruptcy can provide relief. David K. Rudov, Esq. helps you decide whether filing for bankruptcy is the most effective way for you to take control of your debt.
The most important thing to do is not to wait until it’s too late. I have found that a critical factor in helping a company through difficult financial situations is ensuring management fully understands the tools at its disposal to fix those problems at the earliest signs of trouble. As your legal counsel, I can help with:
Bankruptcy, in the right circumstances, can be used to help struggling companies not only survive, but emerge as stronger, more competitive businesses. That is why I help my clients evaluate the risks, benefits and implications of not just a bankruptcy filing but various other alternatives.
For many businesses and professionals, a lack of liquidity or inability to grow due to creditor demands keeps them from successfully resolving their financial problems. As banks and other creditors begin to call loans due, clients begin to have difficulty juggling between them. As these businesses’ and professionals’ cash dries up, so does their ability to keep their creditors content. Once liquidity becomes an issue, clients do not have the time or know-how to work with creditors to restructure the debt into a more manageable plan and run their businesses at the same time.
I begin by analyzing a client’s financial situation from the top down. I review the client’s financial information to determine their current financial position. I then analyze the client’s debt from all aspects, including:
After conducting this analysis, I then begin negotiating with the client’s creditors to restructure their debt so that they can more effectively run their business while meeting financial obligations.
To the extent that no negotiation or restructuring of the corporation or finances has been or will be successful, a Chapter 11 bankruptcy or dissolution of the business may be an option.
In some cases, bankruptcy is the best solution. For professionals and businesses, this typically means a Chapter 11 bankruptcy. There are many reasons why a client may need to file a Chapter 11 bankruptcy. Most often, this is because a client’s creditors have become so aggressive that no negotiation will stop them from taking damaging collection action or the client has allowed the problem to develop to a point that drastic action is needed to prevent the loss of cash or property.
Chapter 11 is the chapter of the U.S. Bankruptcy Code that governs the process of reorganization under the bankruptcy laws of the United States. Alternatively, Chapter 7 governs the process of a liquidation bankruptcy. The purpose of a Chapter 11 bankruptcy case is generally to permit the rehabilitation and reorganization of the debtor’s business. The Bankruptcy Code allows the debtor to accomplish this task by creating an “automatic stay” – a cash flow dam – that prevents creditors from taking collection action against the debtor, including filing lawsuits, obtaining judgments, collecting on levies and garnishments, and other actions that could cause cash to flow out of the business without the debtor’s consent.
I help businesses close their doors in the manner that is most advantageous to the owner of the business with the least amount of impact possible on its employees. Typically, this takes the form of an orderly winding up of the business’s affairs until the ultimate dissolution of the business. Alternatively, I may determine that a Chapter 7 bankruptcy to liquidate the business’ assets is appropriate. In either event, I endeavor to limit the impact on the owner’s personal life and finances.