Bankruptcy Can Halt a Judgment Against you
Running a business is challenging. In addition to meeting the production goals of the corporation, one must also stay current with payroll, pay the mortgage or lease agreement, and cover the costs and expenses necessary to run the business.
Often, the money that is to be paid out exceeds the money that is coming in and business owners are left in a very stressful and vulnerable situation. When this happens, debts can get out of hand, requiring businesses to look for a way out. This way out is often bankruptcy.
Many businesses turn to Chapter 11 bankruptcy to help them overcome their debts. Chapter 11 is useful because it allows a business to continue to operate and formulate a repayment plan. Chapter 11 bankruptcy takes into account the need to take a timeout from spiraling debts and to focus on how to make the business more profitable in order to account for the debts and income issues.
Chapter 11 Bankruptcy Can Stop Lawsuits
Often overlooked is the effect a lawsuit can have on the financial stability of a company. If an accident occurs, a disgruntled employee brings a claim, a product is deemed defective, or someone claims breach of contract, a company may be facing costs and potential liability well in excess of its income.
A pending or final judgment can be daunting for a company, as judgments can be for significant amounts. Bankruptcy can assist in these situations too, as judgments are treated like debts in bankruptcy and can be reorganized or discharged.
One of the greatest benefits of Chapter 11 bankruptcy is the automatic stay. An automatic stay means that creditors are no longer able allowed to contact a debtor regarding their debts. It also means that litigants are not allowed to pressure them to pay the judgment while the bankruptcy is pending. This allows debtors to focus on addressing the financial issues they are facing without costly lawsuits, liens, and foreclosures. An automatic stay gives businesses the opportunity to do what they do best: focus on making their business productive again while halting judgments and collections to increase cash flow.
Call 610-255-7500 today for a free consultation.
Bankruptcy attorney Michael Siddons is experienced in bankruptcy and business reorganization in MD, NJ, and PA, and can help you to fend off the pressures of creditors and judgments in order to focus on your business. The Law Office of Michael Alan Siddons will aggressively protect your business from burdensome debts that may jeopardize its longevity and success.