If you can’t afford to pay a vendor and face legal action, contact the Raleigh business bankruptcy attorney of Bradford Law Offices right now. We might be able to represent you in your bankruptcy case. You could halt collection actions and create a plan to repay the money you owe without risking the future of your business.
As a business owner, you might depend on vendors to provide the products or services necessary for your daily operations. Typically, you sign a contract agreeing to pay them for the work they do for you. Maintaining the relationship is critical for the future and success of your company. You must pay for the vendor’s services or products on time and in full. Unfortunately, you could fall on hard times and not have the finances to live up to your part of the agreement.
Facing debt can be overwhelming. If you hire someone for their services and fall behind on payments, you breach the terms of the contract you signed. The vendor could file a claim against you for the unpaid bills. If you can’t afford to pay them what you owe, your only option might be to file for bankruptcy and create a plan to resolve your debt.
Bradford Law Offices has represented business owners since 1996. We understand the financial strain of vendor debt and the negative impact of facing a lawsuit. Your business could suffer from a collections action, forcing you to sell significant assets or shut down your company entirely. We can help you strategize and determine the most effective method for paying the vendor for their services without disrupting your business operations.
For a confidential consultation to learn more about what Bradford Law Offices can do for you, call us at (919) 758-8879 today.
How Filing for Bankruptcy Could Help
Vendors are often essential to business owners. Entering into a professional relationship with another company often requires a written agreement. The contract you and the vendor sign details the arrangement you make to pay for their services.
Whether you pay a vendor to provide your office equipment or hire a vendor to distribute your products, you must meet the terms of the contract. If you breach the terms, you’re in default and could be subject to a lawsuit if you don’t pay what you owe.
Filing for bankruptcy could alleviate the financial burden you face. Multiple options are available to make structured payments you can afford until you pay off the debt. Instead of continuing to incur interest and penalties, you can eliminate the consequences of your broken contract with the vendor and find a way to resolve your debt for the services or products they provided.
Common Types of Bankruptcy Businesses Can File
Bradford Law Offices can review your case and determine the bankruptcy option that could work for you. Chapter 11 and 7 are the most common types of bankruptcy for businesses interested in liquidating their assets or reorganizing their debt. Chapter 13 is also available if you run your company as a sole proprietorship and want to create a repayment plan.
A range of factors might contribute to your decision regarding the type of bankruptcy you choose. You should discuss your options with Bradford Law Offices to determine which is best for your situation.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is also known as a “reorganization” bankruptcy. As a business owner, you can continue to operate while restructuring your debts. This form of bankruptcy also stops collections actions, so you have the time you need to find a way to pay back your vendors.
Factors you should consider when deciding whether Chapter 11 works for the circumstances you face include:
- Collections actions stop, preventing creditors from pursuing lawsuits, foreclosures, evictions, and levies
- You have control of selling your assets to satisfy your debt
- You can file on an emergency basis when necessary
- You can negotiate payment of your debt, such as extending the payment term, reducing interest rates, or settling for a lower principal balance
- Courts typically allow several years to pay off the money a business owes
- Business owners don’t have to pause normal operations and often end up in a better financial situation due to filing for Chapter 11
Chapter 7 Bankruptcy
Chapter 7 is also called “liquidation” bankruptcy. Filing for Chapter 7 is most beneficial for business owners planning to close the doors of their company. When you file for Chapter 7 bankruptcy, you must liquidate your assets to pay back the debt you owe to creditors. If you owe money to a vendor, you can sell specific property to cover your obligations.
When you file for Chapter 7, the court will appoint a trustee. The trustee is responsible for overseeing the process of liquidating your assets to pay the creditors. They will schedule meetings with your creditors and confirm the debt you owe. They will then manage the sale of your assets to satisfy the amount of your debt to them. That includes the vendors you have not paid for the services or products they provided for your business.
Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy allows businesses that are sole proprietorships to reorganize their debt and create a repayment plan. Instead of a creditor going after you for the full amount you owe upfront, you can negotiate smaller payments you make each month over an agreed-upon period. You must pay back your debt to the creditor within three to five years.
Chapter 13 is an excellent option for business owners who want to keep their property. You don’t have to sell your assets to satisfy your debt like you would with Chapter 7. Additionally, you won’t continue to incur penalties as long as you make the necessary monthly payments on time and in full. If you default on the repayment plan, meaning you miss your scheduled payments, the creditor could come after you for the total remaining amount you owe.
How to File for Bankruptcy as a Business Owner
Bankruptcy offers various advantages, including preventing a creditor from taking legal action against you. Whether you decide to file for Chapter 7, 11, or 13, you can find a way to pay back the vendor and protect yourself from future collections efforts.
You must follow specific steps if you want to proceed with filing for bankruptcy. The steps differ slightly depending on which type of bankruptcy case you pursue. You should consider hiring Bradford Law Offices to assist you with the complicated process. We can guide you through each step and handle the legal aspects for you, so you can focus on your business.
Before you file, the first step you should take is to gather all necessary information regarding your bankruptcy case. That should include compiling a list of relevant financial information, such as:
- Monthly expenses
- Total vendor debt owed
- Total of other debts
You must present this information to the bankruptcy court. The appointed trustee can use your information to learn about your financial situation and determine the best way to manage your case.
Bradford Law Offices will gather the necessary forms you need to complete and obtain all documentation we need to include when filing. We will help you create a repayment plan to submit to the court if you’re filing for Chapter 13. Filing for Chapter 11 bankruptcy will require a reorganization plan.
The court and lender will review your reorganization or repayment plan and determine whether to approve it. If you’re filing for Chapter 7, the court will appoint a trustee to liquidate your assets and pay off the debt you owe to the vendor.
It’s crucial to meet the requirements the court sets after deciding on your bankruptcy petition. If you default on the arrangement, the creditor could come after you for the total amount of money you owe.
Why Hire Bradford Law Offices?
Since 1996, Bradford Law Offices has fought to protect the rights of business owners and keep their companies afloat. We understand the frustration you feel when you fall behind on your payments and worry about the future of your business. Knowing you could lose everything you worked hard for is stressful. Fortunately, there are solutions to your problems, and we’re here to help.
When you hire us, we will review your debt and determine which type of bankruptcy we should file. Whether liquidating your assets or creating a repayment plan is the right choice, you can depend on our legal team to provide the support and representation you need. Bradford Law Offices understands the importance of resolving your debt so you can focus on running a successful business and securing your financial future.
Bradford Law Offices has represented business owners in Raleigh, NC, for more than 25 years. We will work hard to help you turn your financial standing around, so you can keep the doors to your business open and thrive moving forward.
If you owe money to a vendor or face legal action, contact Bradford Law Offices today to discuss whether bankruptcy could help. Call (919) 758-8879 for your confidential consultation, and let us create a strategy to meet your needs and help you find a way to pay off your debt.