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Not every creditor problem requires bankruptcy for a solution. In some cases, an individual or business will, for example, have a limited number of creditors and could pay back its debts if payment deferral or stretch-out terms can be negotiated. Jon B. Clarke can help in this situation, also called a workout or out-of-court debt settlement.

The firm may talk to your creditors one-on-one to negotiate more manageable payment terms. Many creditors would prefer receiving a guaranteed amount of money now instead of forcing a bankruptcy filing and having to wait possibly years before seeing potentially even less. A particular discount, such as 30 cents on the dollar, may be negotiated with current creditors and a payment plan will be set up. Creditors will also seek assurance that the debtor will endeavor to avoid filing for bankruptcy while paying them back. If the debtor has unprotected assets or the business is starting to show profit but just needs more time, the workout can give the debtor the break needed to continue in business.  Frequently, the subtle threat inherent in the retaining of experienced Chapter 11 counsel gives the debtor badly-needed credibility and clout in the workout negotiations.

The firm may advise management to close down the business without bankrupting it. This is applicable where bank loans, tax liens, equipment leases, etc. fully encumber all the business assets such that there's nothing for a Chapter 7 trustee to liquidate. If continuing to operate the business will increase the likelihood of a missed payroll, nonpayment of payroll or sales taxes, or improper utilization of customer deposits, the owners will likely be advised to cease operating. This normally results in stress for the owners as lenders, lessors and trade creditors seek to hold them personally liable for the business debts. The firm can communicate the fact of shutdown to creditors, assert the noncollectability of unsecured debts, and invite negotiation for settlement of verifiable personal guaranty claims against the officers, directors, and shareholders. The firm also counsels the owners of failed businesses on scenarios and strategies for protection of their personal assets.

To learn more about the foregoing alternatives, continue reading through this site and look through the Bankruptcy Information Center  and Web Resources pages to answer your questions. Then fill out Mr. Clarke's Business or Consumer Debtor Analysis Form and submit it. When you are contacted about your case, you can discuss the possibility of developing a strategy for avoiding bankruptcy which works for the benefit of both the debtor and the creditors.