You may have been thinking about business bankruptcy for some time as your business continues to plummet and the bills pile up. However, the decision to file for this type of bankruptcy is not an easy thing to do. There are many factors that a business owner must consider before they jump into the decision of business bankruptcy.
Is Business Bankruptcy a Good Decision for You?
- Figure out your options. There is not just one type of business bankruptcy. For instance, you might choose to go with the option of Chapter 7 bankruptcy, which is a type of proceeding that will wipe out your debts in a period of three to six months. However, the downside to this type of bankruptcy is that you could lose some of your personal property.
- You also have the option of Chapter 13 bankruptcy, which is slightly more complex than Chapter 7. If you choose to go with the option of Chapter 13, you are required to make a payment plan that is based on your income. You will have to come up with a plan showing that you will actually be able to pay for your debts.
- Ensure that you meet the requirements for a specific bankruptcy. There are certain requirements that a person must meet if they want to qualify for business bankruptcy. For instance, if your income is too high, you might not be eligible for Chapter 7. On the other hand, if your income is high, you have a better chance of being able to pay off your bills, which makes Chapter 13 a good option. However, if your income is too low, Chapter 13 will be out of the question because you are unable to show that you can pay your debts.
- Figure out what happens to your most important assets. If your debts are forgiven, you might find that it is easier to pay things like a mortgage. However, filing for Chapter 7 bankruptcy means that your home could be at risk and you could lose everything. You might find that you do not have a secure loan on things like your vehicle, which means that it could be repossessed. This is why it is important to speak with an attorney before you move forward.
- Check on any co-signers. You also need to make sure that no co-signers will be liable for your debt. Look back on any agreements to make sure that nobody will have to pay your debts. Chapter 13 offers them protection but Chapter 7 does not.
- Know that certain aspects will go public. Your personal life will not be so personal after bankruptcy proceedings start. Some of your personal property might be taken and sold off and you might have to ask permission to buy certain things over the next few years.
Speaking with a Business Bankruptcy Attorney
If you are in a difficult position and you are considering business bankruptcy, it is always a good idea to speak with a skilled business bankruptcy attorney. Our attorneys at MJ Watson & Associates understand how complex these cases can become and what is at risk. You are never alone as you face the reality of your situation. Please contact our bankruptcy attorneys for help in your time of need at 817-877-2861.