No business is immune to financial struggles and loss. Even businesses that have been successful for many years can fail due to bad economic times. Bankruptcy offers businesses a way to climb out of debt or restructure debt depending on whether the plan is to close your doors or lower your debt load and carry on with business as usual. The Best Bankruptcy Lawyer In Wichita, KS can help you figure out which type of bankruptcy is best suited to your circumstances and help you throughout the process. The following will cover the basics of business bankruptcy.
Chapter 7
It is less likely for a business owner to choose a Chapter 7 over other forms since it is a liquidation form of bankruptcy. Unless you plan to close your business completely, this option is unnecessary. Many times any assets from your business must be sold off (liquidated) to come up with some funds to pay back at least portions of the debt accumulated from your business. A court trustee oversees the process to ensure creditors get a fair share of the funds.
Chapter 11
This type of bankruptcy is often used by small to large companies. It allows the entity to reorganize and restructure the business debt so it can continue running in the meantime. The court and creditors will be very involved in this kind of bankruptcy and how you intend to restructure the business itself for financial growth.
Chapter 13
Small businesses and individuals can use Chapter 13 to protect their assets and their business. It works in much the same way as a Chapter 11, but is designed for small business owners and sole proprietors. The debt is restructured and a three to five year payoff plan is created. Individuals who file Chapter 13 must have the income to be eligible for this kind of bankruptcy.
These are the three main forms of bankruptcy businesses can take advantage of when they fall upon difficult or challenging debt problems. Chapter 12 bankruptcy is also an option for people in the farming and agricultural arena. The Best Bankruptcy Lawyer In Wichita, KS will provide you with the appropriate advice and representation so you can benefit from this kind of debt relief. Case, Moses & Zimmerman P.A. are attorneys who offer help for all your bankruptcy needs.
