BUSINESS BANKRUPTCY AND INSOLVENCY

Succeeding as a small business owner is challenging under the best of circumstances. When business is in distress the situation is more complicated, more often than not the record keeping and accounting is behind, the business is on a COD basis and planning is relegated to crisis management. Broumas Law Group recognizes that the situation requires more than legal “know how” the financial side of the business also needs attention. We combine legal, accounting and business planning expertise to provide the best possible chance to either succeed, workout of the bad situation, reorganize or to help the business owner recognize when it is time to wind the business down in an orderly manner.

Chapter 11 Bankruptcy Chapter 11 is a powerful tool. It will allow a business or even an individual to restructure and discharge debts. The most flexible of the bankruptcy chapters is designed for any size estate or business. Mortgages can be restructured along any normal commercial terms, interest rates can be modified and loans re-amortized over as long as 30 years. Because it allows so much flexibility it is also fairly complex both from a legal and financial perspective. At Broumas Law Group we can help clients who need to reorganize or to liquidate in an orderly manner under Chapter 11. Unlike the other bankruptcy chapters a trustee is not appointed to help with the business decisions but the existing company management continues to operate the company as a debtor in possession.

Workouts, Restructuring or Orderly Business Shutdowns Non-bankruptcy options can often be less costly and complicated for the small business. If there are limited numbers of lenders and those lenders are cooperative a workout or restructuring is often a viable, less expensive solution for the small business. At Broumas Law Group we can help you organize the financial and legal materials to make a workout proposal to the businesses’ lenders. In situations where we can determine that the business is not likely to survive we can also help the small business shut its doors while minimizing the usual negative effects, taxes and leftover shareholder liabilities when this occurs.

”At the end of every seven years thou shalt make a release. And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the lord’s release.” (Deuteronomy 15:1-2, King James Version)

"If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew." Quran (Sura Al-Baqara), 2:280

Everyone feels badly when he or she cannot meet their financial commitments.  Forgiveness of indebtedness has a long historical and religious tradition in western and other cultures. When times are difficult and we cannot meet our obligations it is often a choice between paying those bills or taking care of our family. In hard times bankruptcy allows you and your family to get a fresh start, free from indebtedness.  In most cases with proper planning we can help you and your family come through bankruptcy without having to give up your home, cars or other belongings. Our friendly professional staff at Broumas Law Group is able to help you through the bankruptcy process so that you can start your financial life over again free from the shackles of your creditors.

Clients often ask what effect bankruptcy will have on their credit. Recognizing that in our society credit is essential it is good that there is a way to get a clean break, eliminate the debts that cannot be repaid and allow people to return to a normal life. While bankruptcy will remain on a credit report for a number of years the effect of the bankruptcy is less than the effect of delinquent or charged off loans. Those bad debts stay on the credit  for years even if they somehow manage to get paid off.  Normally after a couple of years the relative effect of the bankruptcy filing is minimal. Once a case is filed it is easier to purchase a vehicle, in many cases rent an apartment or to obtain other credit.

Chapter7 Bankruptcy A Chapter 7 Bankruptcy case will discharge most debts, will stop lawsuits, garnishments and other collection activities by your creditors. With proper planning and analyses most clients normally will pass through the Chapter 7 process and keep their homes, cars and other belongings. The process is relatively safe provided proper analyses is done beforehand and the legal documentation is prepared correctly.

Chapter 13 Bankruptcy If you are behind with your payments on your home and cannot catch up or are facing a foreclosure we can stop the whole foreclosure process and catch up your payments over five years. In some cases we can also get rid of valueless second mortgages. Chapter 13 allows you to restructure and discharge your unsecured obligations as well. This is a powerful tool which can help you preserve a families biggest investment: their home.

Chapter 12 Bankruptcy If you operate a small farm you may be able to benefit from  a little known type of bankruptcy designed to help the small farming operations. Chapter 12 is a more flexible version of Chapter 13 which permits a complete restructuring of your debt, your home or farm mortgage. Unlike Chapter 13 the debt on your principal residence or other real property can be restructured over a period in excess of five years, the interest rate can be modified and the secured debt can be reduced to reflect the value of the property. At Broumas Law Group we have experience successfully reorganizing many family farmers under this somewhat obscure, bankruptcy chapter.

Workouts and Modifications Loan modifications are common and if a client has a situation where they need assistance with such a modification we can provide them with assistance submitting and preparing the paperwork. Similarly not all clients need bankruptcy relief. Cases where there are a limited number of creditors workout with those creditors may be possible without the need for filing bankruptcy. Let us help you make a decision if this is a better option for you.

Contact Broumas Law Group and we will be happy to help you by phone (410) 840-7575 or (410) 523-8100 or send us e-mail