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 |  | Low: Chapter 7 Starts $1,000-$3,000 |  | Medium: Chapter 7 Can Run $3,500-$5,000+ |  | High: Chapter 11 Starts at $10,000-$25,000+ |
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Bankruptcy laws are intended to protect, if possible, a troubled business and provide orderly distributions to its creditors by either reorganizing or liquidating the business. Bankruptcy is a legal process in which the court administers the property and other assets (referred to as the estate) of a financially floundering business (the debtor) for the benefit of creditors. The most common types of business bankruptcies are Chapter 7[1] , a straight liquidation of the company's assets, and Chapter 11[2] , which allows a business to propose a plan of reorganization to keep operating while paying its creditors over time.
Typical costs: | - Bankruptcy attorneys may charge a flat fee for specific services or at an hourly rate of $100-$300 or more. Some lawyers require full payment in advance while, depending on circumstances, others may accept a lower advance fee plus installment payments.
- Hiring an attorney to handle a straightforward Chapter 7 business liquidation bankruptcy starts around $1,000-$3,000 but can easily run $3,500-$5,000 and more.
- Hiring an attorney to handle a Chapter 11 business reorganization bankruptcy starts around $10,000-$25,000 in some locations, but goes up quickly. A Florida attorney estimates that a Chapter 11 bankruptcy can cost a small business $25,000-$50,000, a medium-sized company $50,000-$100,000, and $100,000-$500,000 for a large business.
- The bankruptcy court filing fee is $299 for Chapter 7 and $1,039 for Chapter 11, but (depending on your location and circumstances) you might be eligible to apply to pay the fee in installments or to have it waived.
Related articles: Personal Bankruptcy, Business Sale Attorney, Accountant
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What should be included: | - In most cases, bankruptcies are filed in federal court; bankruptcy cases cannot be filed in state courts. Federal bankruptcy law is organized into chapters that govern specific types of bankruptcy proceedings.
- Creditors can force a business into an involuntary bankruptcy[3] under Chapter 7 (not a common occurrence), but a Chapter 11 bankruptcy is voluntary.
- The bankruptcy process generally takes about 4-6 months, although it varies depending on circumstances. USCourts.gov outlines bankruptcy basics[4] for the different types of bankruptcies as well as a glossary[5] of common bankruptcy terms.
- Bankruptcy is an extremely complicated process. BankruptcyVisuals.com offers charts[6] of the standard procedures for Chapter 7 and 11.
Additional costs: | - Many bankruptcy attorneys provide a free initial meeting but others may charge $100-$300 or more to listen to your story; analyze any lawsuit, liens or other documents; and lay out your options. .
Shopping for a business bankruptcy attorney: | - Ask potential bankruptcy attorneys about their training and experience. Request references from a bank, other lawyers and several certified public accountants who have worked with that attorney. Lawyers.com offers tips for selecting[7] a business bankruptcy attorney and then preparing[8] to meet and meeting[9] with that attorney.
- Search the American Board of Certification[10] for attorneys certified as specialists in business bankruptcy, consumer bankruptcy and creditors' rights law. Bankruptcy lawyer referrals are also available from Lawyers.com[11] and FindLaw.com[12] .
- Your attorney should provide you with a written fee agreement. Be sure you understand what you will owe in legal fees, and when.
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What People Are Paying - Recent Comments |
| Posted by: Cris Digamo in Fairfax, VA. | Posted: September 6th, 2018 07:09AM |
| Type: business bankruptcy | Law Firm: Bankruptcy |
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External Resources: | - www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx
- www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter11.aspx
- bankruptcy.lawyers.com/commercial-bankruptcy/Facing-Involuntary-Bankruptcy.html
- www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx
- www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Glossary.aspx
- www.bankruptcyvisuals.com/viewcharts.html
- bankruptcy.lawyers.com/commercial-bankruptcy/Selecting-a-Good-Business-Bankruptcy-...
- bankruptcy.lawyers.com/Bankruptcy-Basics/Bankruptcy-Preparing-to-Meet-with-a-Lawye...
- bankruptcy.lawyers.com/Bankruptcy-Basics/Meeting-with-a-Bankruptcy-Lawyer.html
- www.abcworld.org/whycertified/
- www.lawyers.com/bankruptcy/find-law-firms-by-location/
- lawyers.findlaw.com/lawyer/practice/Bankruptcy-Law
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