The novel coronavirus has shut down businesses of all sizes, many of which have also filed for bankruptcy. Even large companies such as Hertz, Neiman Marcus, J. Crew were no exceptions. One of the latest casualties is pizza chain California Pizza Kitchen, which filed for Chapter 11 bankruptcy. According to this New York Times article,
“More than 6,800 companies filed for Chapter 11 bankruptcy protection last year, and this year will almost certainly have more. The flood of petitions from the worst economic downturn since the Great Depression could swamp the system, making it harder to save the companies that can be rescued, bankruptcy experts said.
Most good-size companies that go into bankruptcy try to restructure themselves, working out payment agreements for their debts so they can stay open. But if a plan can’t be worked out — or isn’t successful — they can be liquidated instead. Equipment and property are sold off to pay debts, and the company disappears.”
Interestingly, while the pandemic hit California hard, Chapter 11 filings are in flux. Bloomberg Law notes that
“confirmed coronavirus cases and Chapter 11 numbers rise and fall in their own rhythms. In fact, Chapter 11 cases steadily dropped in California from March (43) to April (30) to May (27) as confirmed cases increased from 8,221 to 41,897 to 61,821. The two only increased contemporaneously in June 2020.”
While big companies make the news when it comes to bankruptcy, the impact these filings have on the workers are not as reported. You may be an employee whose company is immediately facing bankruptcy. Perhaps you or someone you know is about to file for individual bankruptcy after debt consolidation is no longer a viable option.
If 2020 has taught us something, it’s that events like a pandemic can trigger such great economic uncertainty that puts even the most prepared at risk. Often, even major expenses such as health care bills, job loss and other financial loss can result in bankruptcy. But regardless of the reason, there are ways to recover from financial stress. Our bankruptcy attorneys can help find a solution that fits your needs so you can start over with your finances.
Types of Bankruptcy
Get the legal assistance you need and get your financial fresh start. Find out which type of bankruptcy you qualify for and how our bankruptcy lawyers can assist.
This type is also called the straight or liquidation bankruptcy. A court will appoint a trustee who will then own your assets to sell and distribute the funds to your creditors. Under current bankruptcy laws, you must pass a means test before filing Chapter 7 bankruptcy. If your current monthly income is below the Southern California adjusted median income, then you automatically qualify. Our lawyers have helped many people file Chapter 7 Bankruptcy after other attorneys told them that they did not qualify.
Chapter 13 Bankruptcy may help you get out of debt by completing a repayment plan over a 3- to 5-year period. Chapter 13 is often the best option for those who cannot pass the Chapter 7 means test or those seeking to protect assets that would be placed at risk by Chapter 7. We explain your options for loan modifications versus bankruptcy and the prospects of reaffirming secured debts.
This type is a reorganization bankruptcy and is available to individuals and businesses. In contrast to Chapter 7, the debtor remains in control of business operations under chapter 11 and doesn’t sell off all of its assets. The process involved with Chapter 11 personal or business bankruptcy is far more complicated than either Chapter 7 or Chapter 13 personal bankruptcy. In fact, you or your business will have to be involved in the process for several years in most cases. We can help you through all of these steps and explain each option available to you.
The main goal of Chapter 15 is to provide cooperation between a foreign debtor, foreign courts and the U.S. Bankruptcy courts. A foreign debtor who had assets in a number of countries would file Chapter 15. Our attorneys have experience assisting foreign debtors with their complicated debt problems.
Our Bankruptcy Attorneys Can Help
Our boutique law firm offers comprehensive legal services and years of proven experience to help you recover from debt. We also recognize that each case is unique. This is why we deliver creative solutions and fee structures tailored to each client’s needs. Financial relief is possible and we’ll help you navigate the legal process from start to finish. Contact us for a consultation today.