Lovington Business Bankruptcy Lawyer
Lovington, as well as the rest of Lea County, has been growing steadily in the past ten years. Since 2010, the population has grown by almost 10,000 people. Because of this growth, it makes sense that many businesses may want to establish roots in Lovington. In fact, in Lea County, there are over 4,000 registered businesses, as reported by the 2012 American Community Survey data. According to Bestplaces, jobs in Lovington have increased by 7.8% in the last year, and are projected to grow 22.3% in the next ten years.
No matter where you decide to start your business, though, there is always risk involved. The market can be finicky, and the forces of supply and demand can change quickly. Even the most thorough and prepared business owners cannot predict the future, and there may come a time when looking to restructure your business through bankruptcy may be the best option for your company.
If you are in a position where you are unsure about the future of your business and may need to make some tough decisions, get in contact with an experienced bankruptcy attorney from New Mexico Financial & Family Law. With years of experience in bankruptcy law in New Mexico, one of our attorneys will help guide you through this complicated legal process with their expertise. If you would like to sit down and discuss your options with one of our attorneys, please contact us to schedule your confidential, no-obligation case review by calling (505) 503-1637 or contacting us online today.
Secure Your Future Plans With Business Bankruptcy Attorneys in Lovington
Filing for bankruptcy is a serious decision that needs to be well thought out. However, no matter how your business is structured — whether it’s a corporation, a partnership, a sole proprietorship, or another structure — one of our experienced attorneys can help guide you through the bankruptcy process. We can review your finances and debts and reveal the best options as to how to best move forward with your company’s future.
There are several different options available when filing for bankruptcy: Chapter 11, Chapter 13, and Chapter 7. Each option has its own benefits and setbacks, so it’s important to know which solution is best for your goals and for your company. Bankruptcy doesn’t have to mean the end of your business, and filing Chapter 7 doesn’t mean the end of your entrepreneurial opportunities. Talking with an experienced attorney can give you the knowledge and assurance to make the best decision for your company.
No matter which choice is right for you and your business, allow an attorney from New Mexico Financial & Family Law to help walk you through the process. Our experienced bankruptcy associates can provide you with the peace of mind in knowing that someone is there for you, working on your behalf.
Filing for bankruptcy can be a long and trying process, and attorneys are required for all non-sole-proprietorships attempting to file. Allow an attorney to take much of the work off your plate and to guide you towards the best options, freeing you up to focus your attention on your business and the future ahead. Reach out to us so we can assist you today!
New Mexico Business Bankruptcy Attorneys
Being a part of a business is an exciting opportunity, but it also entails risks and the possibility of financial uncertainty. When the path of your business curves in directions you did not expect, you may be forced to consider all available options to meet your debt obligations. Those options include filing for business bankruptcy in New Mexico, as well as other legal alternatives.
No matter what issues your business is facing, it helps to talk to an experienced New Mexico bankruptcy lawyer. (NOTE: If you are a corporation or partnership you are required by law to be represented by an attorney during bankruptcy filing.) By speaking with an attorney familiar with the process of bankruptcy proceedings in New Mexico, you can learn what options are available and what strategies you could use to find yourself back on the path towards financial solvency and firmer footing.
Whether your business is considering filing for Chapter 11 bankruptcy, Chapter 7 bankruptcy, Chapter 13 bankruptcy (for sole proprietors), or any alternative, make sure to talk to a legal professional first. Reach out to New Mexico Financial & Family Law for guidance, assistance, and answers to your most-pressing questions. We will help you find the options that make the most sense for your current challenges and goals, and we will then help you through the process every step of the way.
Types of Business Bankruptcy
Bankruptcy is not the outcome most business owners imagined for their venture when they got started, but filing for bankruptcy is more common than they might have expected. According to one recent survey, around one out of every 12 small businesses owners have filed for bankruptcy before. And while the number of overall bankruptcies filed in 2020 shrank, Chapter 11 business reorganizations rose by 18.7% from 2019 to 2020, according to the federal court system.
It is important to remember that “bankruptcy” can mean dramatically different outcomes and options depending on the situation of the debt-owing company and the chapter of bankruptcy used.
The following are the most common types of bankruptcy filed for businesses in the United States.
Chapter 11 Business Bankruptcy Lawyers
A Chapter 11 bankruptcy is often referred to as a “reorganization” bankruptcy because it allows businesses to restructure, sell off some assets, and repay their unstructured debts through an ongoing payment plan. During the course of Chapter 11 bankruptcy proceedings, the business is allowed to remain open and active, and the business can continue operating once the process has been completed.
Chapter 11 bankruptcies are most-often chosen by large corporations and partnerships. Determining a reorganization and repayment plan can be costly and take up to a year, and there is no guarantee that the business will be able to complete the plan and remain solvent. Nevertheless, Chapter 11 bankruptcy remains the best opportunity for many businesses to continue running while resolving outstanding unsecured debts.
Around 22% of business owners who have filed for bankruptcy have filed for Chapter 11, according to the survey of business owners mentioned above.
Chapter 7 Business Bankruptcy
Chapter 7 bankruptcy is referred to as “liquidation bankruptcy” and is an option for businesses of all sizes, including sole proprietorships, LLCs, corporations, and partnerships. Under Chapter 7 bankruptcy, the company is dissolved, and all assets are sold off by a court-appointed bankruptcy trustee. Creditors and debt-holders are repaid in order of priority, with each receiving a pro rata portion of the total liquidation proceeds.
Eligibility for Chapter 7 bankruptcy is limited to businesses that can meet the low-income threshold and demonstrate an inability to pay. This requirement restricts many businesses to using Chapter 13 or Chapter 11 bankruptcy.
Despite the income requirements, Chapter 7 bankruptcy is the most common form of filing, used by 51% of surveyed business owners who filed for bankruptcy.
Chapter 13 Business Bankruptcy Attorneys
Chapter 13 bankruptcy is a debt reorganization option available exclusively to sole proprietors. It works largely through the exact same process as filing for Chapter 13 bankruptcy with consumer debts. The petitioner forms a plan to repay their debts in regular installments over a 3-5 year period.
Filing Bankruptcy for a Corporation or Partnership
Filing for bankruptcy as a corporation, partnership, or other form of medium to large-sized business takes considerable research, preparation, accounting, and legal strategization. You will need to meet several times with an experienced New Mexico business bankruptcy attorney to begin the process of preparing for your filing.
Whether your business intends to file for Chapter 7 or Chapter 11 bankruptcy, you will need a complete accounting of all your debts and assets, preferably itemized across your various business areas. Both forms of bankruptcy require at least some form of asset liquidation, in most cases, so you will need to be prepared to elect which assets are to be sold (for Chapter 11) or to surrender all known assets to your bankruptcy trustee (for Chapter 7).
A Chapter 11 bankruptcy must have its reorganization and repayment plan approved before commencing with the formal bankruptcy proceedings. As mentioned above, the process can take about a year before a proposal is even solidified and agreed to by all creditors. Repayment then begins while the reorganization takes place. Unlike Chapter 13, there is no set time limit for a repayment plan, but the typical plan sets targets to repay the applicable debts in full within five years.
Filing for Chapter 7 bankruptcy can be a much-shorter process than Chapter 11, particularly since all business activities will cease once proceedings begin. Once assets are fully liquidated and debts are resolved to the satisfaction of the creditors, the case will be closed and the business will no longer legally exist.
363 Sale Option
A “363 sale” refers to §363 of the U.S. Bankruptcy code, and it is an arrangement very similar to Chapter 7 liquidation. However, the key difference is that the business itself is in charge and in control of the sale of assets, as opposed to surrendering all control to a U.S. bankruptcy court trustee.
363 sales can be advantageous for certain businesses looking to completely liquidate but that wish to do so partially under their own terms. However, two key factors to consider are that all creditors must approve of the plan to sell assets to the highest bidder, and that the company selling assets does not receive protections from collection actions in the form of an automatic stay.
Discuss your options with a New Mexico business bankruptcy attorney to learn more about which strategies align best with your requirements and your current goals.
Small Business Bankruptcy in New Mexico
Filing for bankruptcy as a small business can mean more options, but it can also become more-personal if you are a sole proprietor. While forming an entity like a LLC can protect you from some legal and financial consequences during adverse business proceedings, filing for bankruptcy as a sole proprietor also means essentially filing as an individual.
Chapter 7 bankruptcy can be filed by sole proprietors by essentially filing for bankruptcy for yourself and including any separated business assets and debts. However, one key difference is that the business entity cannot have any debts discharged, even if the sole proprietor’s personal debts can be. Further, the business itself is not allowed to include any sort of bankruptcy exemptions, even though the filer can include individual exemptions for personally-held property.
Chapter 13 bankruptcy could be another option, especially if you have the means to repay debts through an installment plan. Note that again, while your personal unsecured debts may be discharged upon completing a Chapter 13 bankruptcy filing, your business entity cannot discharge its debts obligations through the same process.
Small Business Reorganization Act of 2019
The Small Business Reorganization Act was passed by U.S. congress and signed into law in August, 2019. The law essentially provides an easier path for small businesses wishing to file for Chapter 11 bankruptcy. Qualifying businesses will have a U.S. trustee appointed to help oversee the repayment plan and reorganization. In many cases, a meeting of creditors is bypassed entirely, provided the creditors do not seek to establish cause for holding such a meeting. The Act also provides other protections and conveniences to qualifying businesses. Speak to an attorney to learn more.
Alternatives to Business Bankruptcy
Some of the most commonly used alternatives to business bankruptcy include:
- 363 Sale — Described in further detail above, this section of the bankruptcy code allows for businesses to sell their own assets through an arrangement with creditors.
- Assignment for the Benefit of Creditors (ABC) — Allows a business to wholly transfer certain assets or business functions without the buyer being obligated to repay any connected debts. Sale proceeds go to creditors, who must approve of the sale prior to arrangement.
- Voluntary Workout — A voluntary workout refers to agreements made with individual creditors for the repayment of debts to the extent possible, with some portion of the debt being forgiven, in many cases. Note that these workout agreements must be made with each individual creditor, and some may be unwilling to negotiate.
- Debt Settlement and Consolidation — Your business has the option of resolving debts through the use of debt settlement negotiations or taking out a consolidation loan. Note, however, that many businesses offering these services offer no guarantees and often turn out to be predatory scams.
Speak to Experienced Business Bankruptcy Attorneys at New Mexico Financial & Family Law
Our firm has decades of experience representing individuals, small businesses, and large businesses alike as they attempt to resolve their debts and undergo bankruptcy. We provide full-service representation and guidance for our clients, helping them examine all of their options and the pros and cons of each to arrive at the best opportunity for meeting their future goals.
There is no guarantee that business bankruptcy will be completed successfully, nor do all businesses that file for bankruptcy fully resolve all debts to bondholders, stockholders, or secured creditors. Even so, bankruptcy is the only option available to halt creditor collections and resolve all obligations once and for all.
The journey through business bankruptcy is not always short nor easy, but it can bring you and your fellow entrepreneurs to a better place filled with more opportunities than ever before. Take the first step, and reach out to knowledgeable New Mexico business bankruptcy lawyers ready to help guide and advise you along the entire way.
Schedule a confidential, no-obligation case evaluation now when you call (505) 503-1637 or contact us online.