Many Louisiana business owners facing financial difficulties seek debt relief through bankruptcy when needed. Chapter 7 bankruptcy typically includes a  liquidation of assets. Bankruptcy laws can be complex, so it often helps to seek support from someone well-versed in legal terminology.

A medical center in another state is currently navigating the Chapter 7 bankruptcy process. The company’s management contract with the health care district was terminated. Shortly thereafter,  plans were made for another management company to be brought in to handle the business under a new name. A spokesman for the departing management company said that bankruptcy will also put the brakes on a lawsuit that Anthem Blue Cross/Blue Shield has filed against it.  

Simply filing for Chapter 7 bankruptcy results in an automatic stay against collections and pending litigation. The spokesperson stated that converting assets into cash is the swiftest and easiest way to resolve all issues without undermining anyone’s best interests. At this time, the management company is said to owe at least 176 creditors.  

Once liquidation takes place, the cash converted from the filer’s nonexempt assets is typically used to pay back creditors. Of course, to file for Chapter 7 or any type of bankruptcy, one must meet eligibility requirements. It is possible to qualify for one type of bankruptcy but not another.  Any Louisiana business owner or who wishes to learn more about the various types of bankruptcy options available, as well as how to determine a best course of action when facing financial crisis can request a meeting with an experienced debt relief attorney.