Posted on
July 20, 2009
at
1:34 am
I wonder which bankruptcy chapter I should file for my business or if I should file at all... I have several creditors and different lenders, I also owe money from family and friends. Will these all be discharged in bankruptcy? My boat is sinking, can somebody help?
ck Rep Points:
Posted on
July 20, 2009
at
1:45 am
Are you operating your business as a sole proprietor? If so then it is possible for you to get a discharge, but if your business is a corporation, you may not be entitled to a discharge.
Posted on
July 20, 2009
at
1:56 am
Okay Uncle Charlie, there are two different kinds of bankruptcy that a business entity can file. A Chapter 7 and a Chapter 11.
Chapter 7 bankruptcy is the total liquidation of your business' assets. They would be converted into cash by the court appointed trustee in order to repay your creditors and lenders. Chapter 11 bankruptcy is a reorganization or rehabilitation bankruptcy. Much like Chapter 13, only Chapter 11 is for businesses. Chapter 11 restructures the business and the debt payments using the business' future earnings. It is also supervised by a court appointed trustee.
Posted on
July 20, 2009
at
2:11 am
It is a sole proprietorship..and what happens to my business while in a bankruptcy proceeding?
Posted on
July 20, 2009
at
2:13 am
Once your petition has been approved, both sides (yours and your lenders/creditors) are subject to limitations.You would be restricted from selling or transferring assets and your lenders/creditors are prohibited from contacting you to collect.
Posted on
July 20, 2009
at
2:15 am
I see..thank you all. Can you elaborate though on Chapter 7 bankruptcy, it seems the right choice for my business.
Posted on
July 20, 2009
at
2:19 am
Uncle Charlie you have to qualify for Chapter 7 bankruptcy-- you would have to pass what they call
The Mean's Test. That is your income must be below your state requirement. Chapter 7 will liquidate your whole business though...so it is really advisable for you to first speak with a financial counselor regarding filing. Since you did not disclose your real financial picture here in the thread, why not fill out one of those forms, speak with a debt consultant, and get a free assessment? Don't worry, it is free.
Posted on
July 20, 2009
at
2:21 am
Is there an order of priority to the repayment? Who decides this and how?
Em Rep Points:
Posted on
July 20, 2009
at
2:49 am
The secured creditors or those who have collateral for their loans are paid first and then the unsecured creditors next. Also the secured creditor usually gets the items that they have secured as collateral.
Posted on
July 20, 2009
at
2:50 am
And what happens if my assets are not enough to pay for my debts?
