Many small business owners in Rockland County who are facing unexpected financial difficulties may wonder about the consequences of filing a bankruptcy petition. Perhaps the most important question is whether to seek dissolution under Chapter 7 or a reorganization under Chapter 11. The second question is what happens to the business and its assets in a Chapter 7 or Chapter 11 proceeding.
The decision by the leadership of Toys 'R' Us to close the company's stores in the United States is no longer fresh news. While adults in New York mourn the loss of a childhood icon, the company's suppliers are wondering if they will receive payments for toys sold to the retailer over the last few months.
People in Rockland County who are considering filing a bankruptcy petition usually wonder whether they should use Chapter 7 or Chapter 13. A Chapter 7 bankruptcy usually results in the discharge of many of a person's debts, whereas a Chapter 13 bankruptcy results in a plan to pay existing obligations over time, usually five years. While Chapter 7 may seem more appealing, only individuals whose income is below a prescribed level are eligible for Chapter 7. People whose income is above the prescribed level must file under Chapter 13. Nevertheless, approximately 70 percent of all bankruptcies are filed under Chapter 7, while the other 30 percent are filed under Chapter 13.
When people in Rockland County consider bankruptcy, they want to reduce their debts by the greatest amount possible. A natural question is whether all debts can be discharged in either a Chapter 7 or a Chapter 13 consumer bankruptcy proceeding. The unhappy answer is "No."
Tops Markets, LLC, one of the most recognizable names among grocery chains in New York and nearby states, has just filed a petition for bankruptcy under Chapter 11. Tops, based in Williamsville, New York, operates 169 stores in upstate New York, Pennsylvania and Vermont. The company's management expects to keep all of its stores open while it restructures its finances under the shelter of the Chapter 11 bankruptcy process.