Bankruptcy

Sometimes, despite your best efforts, it is not possible to pay all outstanding debts in full. At Andreozzi Bluestein LLP we understand that bankruptcy can provide much needed relief in helping our clients get a fresh start.

Bankruptcy

Sometimes, despite your best efforts, it is not possible to pay all outstanding debts in full. At Andreozzi Bluestein LLP we understand that bankruptcy can provide much needed relief in helping our clients get a fresh start.

Bankruptcy is a complex legal system designed to offer both individuals and businesses opportunities to reorganize their finances and to obtain a financial “fresh start”.  It is also designed to try to offer creditors and bankruptcy trustees opportunities to challenge bankruptcy fraud and abuse for the benefit of the creditors of bankruptcy debtors.

The attorneys at Andreozzi Bluestein LLP have substantial experience representing both businesses and individuals as bankruptcy debtors.  They also regularly represent bankruptcy creditors, representing the interests of secured creditors, working as counsel for bankruptcy creditors’ committees, and/or defending fraudulent conveyance claims or preference suits brought by bankruptcy trustees or Chapter 11 debtors.

Representation of Individual Bankruptcy Debtors

At Andreozzi Bluestein LLP, we understand that sometimes, despite your best efforts, it is not possible to pay all outstanding debts in full.  In such cases, we can work with you to determine if a bankruptcy case can help to provide the financial relief you need in order to get a fresh start.

Bankruptcy can provide both businesses and individuals with the opportunity and a mechanism which can help them to address many kinds of financial issues, including those brought about by mortgage foreclosures, judgments and lawsuits, excessive credit card debt and IRS collection actions.

In addition to stopping collection, Bankruptcy can also be a critical step to help both individuals and businesses deal with their outstanding tax problems.  Although some taxes are not dischargeable in bankruptcy, depending upon your facts and circumstances and the kinds of taxes involved, some tax debts may be discharged through the bankruptcy process.  Additionally, even if your taxes are not dischargeable through a Chapter 7 bankruptcy case, bankruptcy reorganization cases under Chapters 11, 12 or 13 allow tax debts to be paid out over a far longer time period than the IRS or State taxing agencies would allow outside of bankruptcy.

The rules with regard to discharge of taxes are quite complex and a thorough understanding of the relevant provisions of the Internal Revenue Code and the Bankruptcy Code are necessary to navigate these complexities and to successfully utilize the bankruptcy process in solving a tax problem. Members of our firm not only consist of former IRS attorneys, but also attorneys that worked for both the Justice Department Tax Division and the United States Attorney’s Office.  Before going into private practice to represent our current clients, a number of our attorneys represented the IRS in Bankruptcy Court and are well versed in how to deal with taxes and bankruptcy. Often, bankruptcy can be the best solution for a troubled taxpayer since it not only provides relief for the tax liabilities, but also provides for a global settlement of all outstanding debt and a “big picture” solution.

Representation of Business Reorganization Bankruptcy Debtors

The attorneys at Andreozzi Bluestein LLP have substantial experience representing both corporate and individual bankruptcy debtors to reorganize their businesses and financial affairs under Chapter 11 of the Bankruptcy Code.  In such cases, we can work with you to determine if a Chapter 11 bankruptcy case can help to provide the financial relief you or your business needs in order to get a fresh start.

Bankruptcy is a process under federal law which may help businesses which are not currently in a position to pay all of their debts as they come due by giving them additional time to reorganize their finances, to reduce operating expenses and increase profitability, so as to be able to develop a plan to address their problems and to pay those obligations which must be paid in full over a more extended period than would be available to them outside of bankruptcy.  At the time a bankruptcy case is filed, an “automatic stay” goes into effect and creditors have to stop, at least temporarily, any efforts to collect on debts which arose before you filed for Chapter 11.  Chapter 11 can also stop lawsuits, bank foreclosures and repossessions, creditor efforts to terminate defaulted leases and contracts, and halt IRS collection actions.

When should a business consider Chapter 11?

Chapter 11 offers business debtors breathing space to allow them to reorganize their businesses and their finances.  Examples of situations where a Chapter 11 bankruptcy filing could benefit your business include:

  • Chapter 11 can allow a business to address a pending or threatened default on secured bank debt by enabling it to restructure its repayment terms with its secured creditors, both extending payment terms and reducing monthly payment amounts.
  • In the case of a business which owes its secured lenders business debts in amounts which substantially exceed the value of the collateral available to secure those debts, a Chapter 11 Debtor can ask the Bankruptcy Court to “strip down” the secured debt which must be repaid to the actual value of the collateral securing that debt.
  • Chapter 11 stops pending or threatened collection actions by the IRS and/or State taxing authorities. Although most business taxes are not dischargeable, in some cases, depending upon the age of those taxes and based upon the kinds of taxes involved, those taxes may be dischargeable.  Even if those taxes must be paid in full through a bankruptcy case, Chapter 11 bankruptcy allows a business substantially more time to repay those taxes than would be permitted by the IRS or the State outside of a bankruptcy case.
  • Chapter 11 allows a business which has been the victim of internal mismanagement or fraud the opportunity to defer the pressure of creditors demanding immediate payment and allows management time to develop new business plans to enable it to address problems which may have arisen because of those issues.
  • Chapter 11 permits a business debtor which has either expanded too quickly and has too many locations or which has entered into a contract or lease which it is now no longer in its financial best interest may seek to “reject” those unprofitable contracts or leases.
  • Where a business’ assets exceed its debts, but where its assets cannot be quickly liquidated for their fair value, Chapter 11 can be filed to forestall the immediate collection demands of impatient creditors, so as allow a business to conduct an orderly liquidation of its assets.

The Attorneys at Andreozzi Bluestein LLP have substantial experience representing Chapter 11 debtors, assisting them to seek the additional time and opportunities Chapter 11 offers for a business to reorganize their business through Chapter 11.

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