The Advantages Of Business Bankruptcy TN

By Thomas Stewart

The economy of the last decade took a negative toll on millions of small businesses throughout the country. Your own may not have been able to survive the economic turmoil that resulted in companies losing money needed to pay bills. Recovering from such devastation can take years that you cannot afford to spare right now. You might have creditors knocking at your door demanding money which you simply do not have in your bank account. When you realize how and when to use business bankruptcy TN entrepreneurs like you may have a future to look forward to and also have a legal means with which to protect your assets.

Taking this legal step to protect your assets may be necessary sooner rather than later. Depending on your financial situation, you may be told that creditors like banks and equipment loan holders can seize your assets and sell them off to settle your debts. This action could mean losing your company's car, liquid assets like cash and accounts receivable, and perhaps even personal possessions like your home.

Filing this action in court prevents the creditors from seizing your belongings. It puts your company into a protected status with the federal court until your case is heard and decided. No creditor can levy the assets because these belongings will be put into possession of the court and the court trustee.

In some instances, the trustee can decide to liquidate assets after the case is decided, however. For instance, if you have more than one vehicle, the secondary one may be sold to settle some accounts as long as it does not have a lien on it. The money will be used to close out accounts with creditors. You will have no legal say in this action if you are filing for a total liquidation of your debt.

However, the judge has the legal obligation of protecting your income, your primary home, and at least one car in your possession. These assets are deemed necessary for you to be able to live a productive life. The creditors cannot lay claim to them and instead may be told that they have no choice but to write off your debt entirely.

Filing for this action quickly may be necessary to beat creditors to the proverbial punch. If they suspect you could file for the case, they may take action against you first to collect on any money possible. Once your case is filed, they are obligated by law to stop collection activity and to cease contacting you.

Hiring an attorney who specializes in this area of law could be recommended to make the case as simple as possible. You hand off the more important obligations to a trained lawyer. You can focus on going back to your normal everyday life and rebuilding your company.

Filing for bankruptcy might be the only way you have to protect important assets in your possession. Without this legal protection, creditors can lay claim to them. They also could seize your bank account and home. An attorney can help you file for this protective legal action right away.

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