If you are the owner of a business you ought to be careful about maintaining a balance between your assets and liabilities wherein you aim to increase your assets that not only breaks even but also takes you ahead on the road of profitability. But when things do not go your way and your liabilities over shadow your assets there comes a point when you have to face the truth that your business is not doing too well and maybe at the end of the road you have to file for business bankruptcy.
Starting a business isn't a child's play and one requires massive investment to get down to serious business dealings. No individual unless a billionaire has that amount of cash to make the investment and hence a lot of businessmen take the help of credit to buy assets and get entangled in debt when there is excess usage of the credit facility. Filing business bankruptcy helps the business owner get out of debt even though it might affect the credit rating of the business.
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Business bankruptcy may not really affect its image as many players in the market file for business bankruptcy to streamline their business and re-structure the company. One should consult bankruptcy lawyers before taking the major step so that the business owner is safe from all sides before filing for business bankruptcy. However, selecting which business bankruptcy to file depends on the type of business which comes with their own set of rules and regulations. This is where a bankruptcy lawyer comes into the picture, to help settle the dilemma of different businesses as to which type of business bankruptcy to file. A look at the type of business forms the basis of filing for business bankruptcy.
Chapter 7 Bankruptcy- Corporations and Partnerships: In this scenario the stakeholder is separate from the legal entity i.e. the corporation and partnership. The corporation will file business bankruptcy which will not directly affect the stakeholders...
Chapter 7, 11 & 13 Bankruptcy- Proprietorship: In this case the owner takes the sole responsibility of filing business bankruptcy.
The different types of bankruptcy cases or proceedings that can be availed by businesses or individuals are as follows:
In the case of chapter 7 bankruptcy proceedings one has to liquidate all the assets to pay off the debt. Once the payment is made, the debtor may be discharged of his debt by the court. This type of bankruptcy is mostly filed by businesses or individuals.
In the matter of chapter 11 bankruptcy proceeding a huge business which has expanded operations in a lot of places and is now under tremendous debt is allowed to retain its assets and carry on its business operations as usual under the supervision of the court. Any massive business house will have to think twice before jumping into filing a business bankruptcy as it will definitely involve huge costs.
When it comes to chapter 13 bankruptcy only an individual with a regular source of income is allowed to file for this type of bankruptcy. One has to qualify for filing this bankruptcy which decides that the debtor will pay the debt on a monthly basis from his income and at the end of the set time period the rest of the debt left will be waived off.
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.
Rating of Chapter 13 Bankruptcy Rules
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