FAQ: Answers To Some Common Questions About Filing For Bankruptcy
In this article, you can discover:
- The process for filing a personal Chapter 7 bankruptcy and how it compares to an assignment for the benefit of creditors.
- The challenges and alternatives to Chapter 11 bankruptcy filings.
- The concept of a dump buyback and its benefits for unsecured creditors.
- How assets are valued in bankruptcy and the factors that influence their worth.
What Is The Process For A Personal Chapter 7?
The process for a personal Chapter 7 bankruptcy can be quite intrusive, especially compared to the alternative, an assignment for the benefit of creditors. The assignment consists of three documents: the assignment for the benefit of creditors, an affidavit by the principal concerning the company’s assets and liabilities, and a certificate of the vote. In Chapter 7, you would need to fill out 72 pages of schedules and statements of affairs.
Are Chapter 11 Bankruptcy Filings Beneficial To The Average Debtor?
While I have done a lot of Chapter 11s in the past, they can be quite expensive, and 90% of them fail. They are also time-consuming for the attorney and the debtor. Under a Chapter 11 bankruptcy, debtors need to open up debtor-in-possession accounts, track their checks and debits, file statements with the trustee’s office, and pay all their taxes. Additionally, the business must be profitable. There is an alternative to Chapter 11s through the assignment for the benefit of creditors, which is often more successful and less expensive.
What Is A Dump Buyback?
A dump buyback is a process where company A gets liquidated through the assignment for the benefit of creditors, and company B gets set up to buy back the assets at their liquidation value. In the bankruptcy business, everything comes down to dollars and cents, and assets are valued based on their liquidation value. This method helps unsecured creditors receive something rather than nothing.
How Do You Determine The Value Of Assets In Bankruptcy?
In bankruptcy cases, assets are valued based on their liquidation value. This means that unless a person has assets of significant value, such as a Picasso painting, personal property is typically worth very little, and trustees often won’t spend time selling items with low value. However, when dealing with business assets such as liquor licenses, the value will depend on the location, as values can vary significantly between towns. The key here is to determine what an asset is truly worth in a specific location.
With the guidance of a skilled attorney for Bankruptcy Law, you can have the peace of mind that comes with knowing that we’ll make it look easy. For more information on Bankruptcy Cases in Massachusetts, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (978) 922-8440 today.