Understanding The Details of Filing For Chapter 11 Bankruptcy
Recently, Chapter 11 bankruptcy has become a hot topic in the news thanks, in part, to the unprecedented presidential run of Donald Trump. At the center of many criticism of Mr. Trump is the fact that he has used bankruptcy laws when it comes to running his many businesses. According to reports, he has filed for bankruptcy on behalf of his businesses multiple times, yet he is still able to facilitate many other businesses and able to finance, in part, his own presidential run. Due to the fact that many people do not realize the variety of differences in the bankruptcy laws, many people often ask the question, if Donald Trump has filed for bankruptcy how is he still a billionaire?
The simple answer to the question of how Donald Trump still manages to be a billionaire is the fact that he used the Chapter 11 bankruptcy laws to file for bankruptcy on behalf of his businesses, he has never filed for personal bankruptcy. In short, this means that Mr. Trump’s personal fortune has remained intact that the specific business that he filed bankruptcy for has failed. Chapter 11 bankruptcy is a specific chapter of the bankruptcy laws that is available for any business, regardless of whether they are categorized as a corporation, partnership, or sole proprietorship.
When it comes to the business realm and bankruptcy laws, there are two major chapters in the bankruptcy code that deal specifically businesses: Chapter 7 and Chapter 11. The major difference between the two chapters is the fact that chapter 7 bankruptcy entails that business operations cease and a trustee is chosen to sell the assets of the company and distributes the proceeds to the various creditors. However, in Chapter 11 bankruptcy, the debtor can still remain in control of their business and they can continue to run the business under the supervision of the court. Essentially, this allows the debtor to negotiate to pay off the debts with a variety of creditors with the understanding that payments must continue to be made. This route can be optimal for both parties involved as if the business continues, the creditors have more of a chance of being able to recover closer to the amount of money that they are owed.
The Law Offices of Marc A. Futterweit is well versed in working with clients through any chapter of bankruptcy that they may fall under. Regardless of what chapter you must file for, we will be able to put together a comprehensive plan to ensure that you are able to move forward toward a fresh start in your life. We will always take the time to walk you through what you can expect as the process moves forward and we will counsel you as to the best choices you can make during this time. If you are interested in learning more about the various chapters of bankruptcy and your various options, please call our office today at 973-442-0200 or visit our website at www.futterweit.com.