Bankruptcy in United States of America
The United States has the most diverse and resilient economy in the world. While it offers unparalleled commercial opportunities in times of growth, the United States also provides a wide range of support mechanisms available when times are tough.
In the United States bankruptcy law is designed to reconcile the interests of both debtors and creditors in the best possible way for all parties. Davies & Associates is able to support both debtors and creditors through the bankruptcy process after exhausting all other options available to them.
Coronavirus/Covid-19 Bailout Relief Package
The United States government has passed a stimulus bill to provide support to companies facing challenges related to coronavirus Covid-19 pandemic. This comes on top of a range of other state and federal programs designed to support firms facing financial difficulty. Prior to filing for bankruptcy, we take our clients through a range of loans, grants and tax incentives on offer.
We hope that some of these relief schemes will assist with cashflow, allowing firms to pay their creditors and avoid the bankruptcy system. Inevitably, however, some firms will need to file for bankruptcy.
The two most important stakeholders in a bankruptcy case are debtors – the party seeking debt relief – and creditors – the person seeking for a debt to be paid. Davies & Associates works with both debtors and creditors.
Creditors: Bankruptcy & Debt Collection
D&A support our creditor clients through each step of the bankruptcy process as they seek the repayment of as much of a debt as possible in the quickest time possible. Many of our clients are small-and-medium-sized enterprises (SMEs) sitting in the middle of complex supply chains with their own vendors and suppliers to pay. Without strong and timely legal support, these creditors may be at risk of bankruptcy themselves.
Debtors: Filing for Bankruptcy
When declaring bankruptcy, a petitioner must select a “Chapter” of the Bankruptcy code they need to file under. D&A helps our clients determine the most appropriate chapter.
The most common form of bankruptcy filing in the United States is Chapter 7 Liquidation. Under this chapter the debtor’s assets are liquidators to repay its creditors. Chapter 7 is available to both individuals and businesses. For debtors, especially LLCs or corporations, who are able to show that there is more value in continuing to operate than liquidating assets, the best option may be filing under Chapter 11 Reorganization. By reorganizing debts and continuing to operate, both the debtor and its creditors may be better off in the longer term. D&A uses its extensive business experience to assist LLCs with developing a reorganization plan in conjunction with its creditors.
D & A is able to support our clients with filing under any chapter, including Chapter 13 Adjustment of Debts of an Individual with Regular Income. Under this chapter we help individuals agree a settlement amount with their creditors and develop a workable repayment plan to match. Corporations and LLCs are unable to file for Chapter 13 bankruptcy.