Bankruptcy in business is common part of business, no matter what market you are in. It occurs especially among companies owned and operated by everyday people who place everything they have in order to succeed. There are time when even successful companies become entangled in debt forcing them to consider a business bankruptcy as their only option. Business bankruptcy occurs when a business organization has more liabilities than assets. They are no longer capable of meeting their financial obligations.
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Many businesses file for bankruptcy because of the relief it provides owners drowning in credit problems with no way out of debt. The good thing about a business bankruptcy compared to a personal bankruptcy is they fact that so many companies do it as a way of restructuring their business that there is not the negative stigma around it. It is a way out when all possible solutions fail to alleviate a current situation. Here is how you can begin a business bankruptcy:The first thing you need to understand is that there is more than one type of bankruptcy. There is one known as Chapter 7 filing and it involves the total liquidation of assets as well as the dissolution of your business. Then there are Chapters 11 and 13. These two give you some sort of protection from creditors allowing you to repay debts over a period of three to five years. The Chapter 13 bankruptcy is often used by sole proprietorships and partnerships with secured debts of less than $807,750 and unsecured debts of less than $269,250. There is also one known as Chapter 12 but this is mostly for family farmers and probably won't affect you. If you ever run into any problems, issues, or questions, do not hesitate in contacting a lawyer specializing in bankruptcy. They can help you determine if your business should file for bankruptcy and also give you advice on what kind. The lawyer will need all of your information regarding your company's finances, income, assets and debts. Organize all of this so that they can correctly file the appropriate forms with the bankruptcy court. Once you file for bankruptcy, your business immediately is granted financial protection from creditors. As a matter of fact, the bankruptcy court notifies all of the listed creditors of your filing for bankruptcy plus of the upcoming meeting with creditors. Once you file for a Chapter 7 bankruptcy, the court will schedule a meeting of creditors where you will more than likely give up non-exempt assets to a court-appointed trustee. The court then sells off your assets to pay off your creditors. After you have filed for a Chapter 11 or a Chapter 13 bankruptcy, you then need to submit a plan of repayment. Some courts also require you to plan some kind of reorganization for your business. In this plan, you will show your creditors how they would gain more from your business's reorganization than from its liquidation. It doesn't mean you are out of the woods quite ye. Your creditors then vote yes or no on the plan. After have filed for a Chapter 7 bankruptcy, you will be released from debt in a matter of a few months as long as you follow all of the correct steps.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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