How a Bankruptcy Attorney Tacoma WA Will Help with Executory Contracts [mortgage-scam.blogspot.com]
When you file for bankruptcy with the help of a bankruptcy attorney Tacoma WA, you may have outstanding contractual obligations at the time. This is especially common when a bankruptcy attorney Tacoma WA assists companies in filing Chapter 11. If you have a contractual obligation that you are expected to fulfill, bankruptcy law provides several different options for how that contract is to be handled. It is advisable to speak with a bankruptcy attorney Tacoma WA in order to learn more about your options for dealing with unfinished contracts in bankruptcy.
Understanding Executory Contracts with the Help Of your Bankruptcy Attorney Tacoma WA
While different chapters of bankruptcy work differently and have different rules and requirements for debtors, contracts typically become an issue in bankruptcy when they are considered "executory contracts." A bankruptcy attorney Tacoma WA will help you to determine whether any of your contracts fall under this definition.
The term executory contracts refers to contracts where both parties still have contractual obligations.
For instance, you must be obligated to do something and the person or business you entered into the contract must also be obligated to do something.Since both parties still have things they must do in order to avoid breaching the contract, there are a few different options for how a debtor will respond to the contract. As your bankruptcy attorney Tacoma WA will explain:
One option is for the debtor to confirm that he/she will perform according to the terms of the contract. Once a debtor affirms the contract and promises again to perform, the debtor is obligated to do so and fulfill his/her promise to perform. The other party to the contract is also obligated to fulfill his contractual obligations. Another option is for the debtor to decide to breach the contract and not perform. This is referred to as rejecting the contract. If a debtor rejects the contract, then the other party to the contract will have a claim for breach. This contractual party who is left with a breached contract will thus become like any other creditor with a claim on the state.While a debtor is making up his/her mind about whether to perform the contract or not, the other party is typically obligated to continue performance as required by the contract.
When you are declaring bankruptcy, deciding how to handle executory contracts is very important. You should always speak to a bankruptcy attorney Tacoma WA in order to get advice on whether it is in your best interests to affirm a contract or to reject it. Your bankruptcy attorney Tacoma WA will look at your financial situation and other relevant factors in helping you to make an informed choice.
Find More How a Bankruptcy Attorney Tacoma WA Will Help with Executory Contracts Issues
