Modern bankruptcy law and debt restructuring for companies -


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Modern bankruptcy law and debt restructuring for companies

Modern-day bankruptcy and restructuring laws for companies are a lot different than earlier before. The essential task of bankruptcy lawyers today is to avoid bankruptcy. This is where business debt restructuring comes into place. Debt restructuring is a way to sort out a company’s payments in such a way wherein debts can be eliminated without causing any harm to either of the parties. This is why debtors often settle for a number of measures instead of choosing to pursue their debts entirely.

This is why bankruptcy attorneys today are skilled in a number of fields including but not limited to litigation and mediation. In many cases, both the debtors and the attorneys are of the mindset to pursue a feasible option that ensures that they receive the most money to settle the debt without damaging the company (as much as it can be helped).

One of the most pursued options is an equity swap. In this, debtors trade a certain amount of money that is owed to them in exchange for an equity stake in the company for the same value. This helps the company operate with a newfound vigor, which further helps them to generate profits and clear off any further debt. Another option pursued often is debt settlement. Companies can choose to negotiate with their debtors informally and settle upon new terms of payment. This can include a lower rate of interest, a discounted price, or any other terms that can be agreed upon. This is one of the reasons why bankruptcy attorneys practice mediation techniques to help eliminate debt.

Restructuring is a common solution for companies who do not want to declare themselves bankrupt. Under chapter 11 bankruptcy, the court provides a specific restructuring procedure for companies in a way where they can slowly and effectively work together with their debtors to clear off their debt. This is a preferred option to a bankruptcy lawsuit as under the new laws, a bankruptcy lawsuit seldom helps either party.

When debt consolidation does not work out for a company or if the company does not want to pursue that as an option, they can always choose to file for bankruptcy. The most common type of bankruptcy filing is a chapter 7 bankruptcy which helps the company clear off most of its debts and liquidate in order to give the debtors a piece of what they are owed.

Many companies today seek debt restructuring as an option before considering liquidating themselves to pay off their debtors. Regardless, if this new structure does not work or if the company is unable to honor the terms of the debt repayment plan, they are forced to choose the last resort wherein they liquidate and clear off their debts to pay their debtors back.

If you have been contemplating such a scenario, your best option is to consult an able bankruptcy attorney who is well versed in bankruptcy law for companies and can help you understand your case. Further, your attorney should help you take the right steps to achieve the best possible outcome. It is important to find a lawyer who can walk you through a series of scenarios and help you decide your company’s “best-case” outcome.

At Dsouza and Strachan law, you will find a team of well-versed attorneys who can help you through various kinds of lawsuits including but not limited to debt settlement lawsuits. When faced with such a situation it is best to consult an attorney who can review your case in detail and help you choose to understand the best possible steps to ensure the best outcome for your company. For a consultation, give us a call today. (Phone number)

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