Choosing the Right Filing
When your business is experiencing financial difficulties, it’s almost certain to have a detrimental impact on your personal finances as well. If you don’t have the business resources to properly compensate yourself, you can easily fall behind on your mortgage, car payments or other obligations.
The bankruptcy laws were enacted to give individuals and business owners an opportunity to start over again. When it’s your business, though, that’s causing most of the problems, you may be uncertain whether you should file for personal bankruptcy protection or try to secure the future of your business with a bankruptcy petition.
Your Options When Filing a Business Bankruptcy
If your business is failing and there’s little hope of resurrecting it—maybe your market has disappeared or you don’t have the capital to keep going—your decision might be easy. You may be best served by liquidating your business with a Chapter 7 filing. You’ll have to sell any assets that aren’t exempt to satisfy creditors, but you’ll be able to permanently rid yourself of your business debts.
If, on the other hand, you have a sound business plan and are confident that your problems are only temporary, you may want to consider a Chapter 11 filing for your business. With a Chapter 11, you’ll get the benefit of the automatic stay (it applies to Chapter 7 proceedings as well), which keeps your creditors from calling, sending you collection letters or taking legal action to collect a debt from you, other than through the bankruptcy court. When you file for protection under Chapter 11, you must put together a plan for repayment of your creditors and it must be approved by your creditors.
The Different Types of Personal Bankruptcy Filings
With a personal bankruptcy, you have the option of discharging debts through Chapter 7 or reorganizing your debts with a Chapter 13 petition. However, you must qualify to file under Chapter 7 by submitting to a means test. The means test calculates whether you have the resources to repay your creditors over a three-to-five year period.
Contact Heath, TX Bankruptcy Attorney Carrie Weir
I offer a free initial consultation to all potential bankruptcy clients. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.
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