How a Maryland Bankruptcy Attorney can Protect Your Business Against a Creditor Judgment
If a creditor obtained a judgment against you or your business, a Maryland bankruptcy attorney can offer a couple of solutions that can enable you to continue running your business while getting the creditor off your back. In some cases it may be necessary to file for Chapter 11 or 13 bankruptcy, but there may also be ways to avoid filing for bankruptcy in Maryland.
First of all, if your business is a limited liability company it may already be protected from judgments rendered against you personally. Laws for limited liability companies are designed to protect partnership property against the liabilities of a single partner or shareholder. However, there are exceptions and corporations differ from limited liability companies in several respects. Check with your attorney to see if your business is safe from personal liability.
If your business is a sole proprietorship or the judgment is against the business itself, there are a couple of options your Maryland bankruptcy attorney can offer.
Have Your Maryland bankruptcy attorney Negotiate with Creditors
Negotiating with your creditors should almost always be the first step in resolving a judgment that affects your business. Most of the time it is in the creditor’s best interest to allow your business to continue running because they can usually get more money out of your business profits through a negotiated repayment plan than they can by selling all your business assets. An experienced Maryland bankruptcy attorney can usually negotiate better terms than business owners can on their own because they know what options are available and how creditors usually work.
In some cases continued running of the business may not be possible but Chapter 7 bankruptcy may not be desirable either because sale of the assets through bankruptcy may not yield enough to satisfy creditors. In these kinds of circumstances, your attorney may be able to help you negotiate an Assignment for the Benefit of Creditors. This is an arrangement in which all the assets of the business are sold and the proceeds are used to pay off your debt. Under certain circumstances, effective negotiations may mean that any extra funds are returned to you. Your attorney can help you determine whether this is a viable option for you and ensure that procedures are followed correctly.
File for Chapter 11 or 13 Bankruptcy in Maryland
If negotiations fail, your Maryland bankruptcy attorney can help you file for bankruptcy. If you want to continue the business, then you’ll likely want to file for Chapter 11 or 13 bankruptcy. These bankruptcy options allow the business to keep its assets and continue running while the debt situation is worked out. Under Chapter 11, an incorporated business reorganizes its affairs in order to regain profitability and begin paying down its debt again. The reorganization plan must be approved by the creditors. Under Chapter 13, a sole proprietorship can submit a plan for paying back its debts over a certain period of time, and at the end of that time any remaining unsecured debt is discharged. Normally, an experienced Maryland bankruptcy attorney can negotiate a better reorganization plan or repayment plan than a business owner can on their own.
If a business’ debt situation is so severe that reorganization or repayment plan is not a viable option, it is likely the business will have to close up shop and sell all its assets through a Chapter 7 bankruptcy in Maryland to satisfy the debt.
If you may need to file for bankruptcy in Maryland but want to keep running your business, John Burns and his firm can help you file for Chapter 11 or 13 bankruptcy or negotiate with your creditors. Call our Maryland bankruptcy attorney’s office at 301-441-8780 to schedule an appointment.
Categories: Business Bankruptcy