Filing for bankruptcy within your business might be one of the biggest and most frightening decisions that you will ever make, which is why many people delay and research their options before speaking with an attorney. In doing so, you might come across many myths and misconceptions regarding these filings that can cause you further concerns. What is Chapter 7 bankruptcy and what myths do many people hear about these filings?
A Brief Overview of Chapter 7 Bankruptcy
If your company is in danger of a variety of debts, you as an employer might make the decision to go through the process of Chapter 7 bankruptcy. This process will wipe out a debtor’s debt, giving your business a clean slate to build upon. In many of these cases, a debtor has debts that are not specifically tied to the property such as outstanding credit card debts or medical debts. A trustee will be appointed to these matters to ensure that property is sold off so that creditors can receive their payment.
If this sounds like the right choice for you, you might have already started talking to friends, family, or other owners of businesses to find out more about bankruptcy and if it is the best decision for you. However, in your research, you might have found many negative aspects that have now frightened you about the future of your business. We want to take a closer look at some of these familiar myths and misconceptions and show you the reality of your business situation.
Myths and Misconceptions
You’ll lose everything important to you. Your assets might be incredibly important to you, including your house, car and any other assets you might possess. Under some of the recent laws that have been passed concerning bankruptcy in Texas, you will be able to keep your car if it is under a certain amount. If your house is worth a certain amount, you might have options, but you could still speak with your attorney about Chapter 11 bankruptcy, which could be a better option for you.
Every single debt you have will now be forgiven. You might be under the impression that you will be free from all debts, but you will only be free from some debts under Chapter 7. You want to look at this from a realistic angle since you will still be liable for taxes, child support, alimony, and other aspects.
If you’ve filed in the past, you can’t file again. Laws state that you are limited in the amounts that you can file for bankruptcy but it is true that you are able to file again even if you have filed in the past. After your last Chapter 7 bankruptcy, you have to wait 8 years before you can file again.
You should simply hold off and pay your debts instead of filing for bankruptcy. You might have weighed your options and wonder if you should just hold off and pay off your debts. However, if your debts are more than 50% of your annual income, bankruptcy might be the best long-term payoff. Living debt-free only reduces the stress you could be feeling about your situation.
If you had to file for bankruptcy, you’ve personally failed when it comes to your business. This is a personal feeling you might have as a business owner, but yet again could not be further from the truth. This is a way for you to remedy a poor financial situation and build from the ground up. We cannot help some of these matters and it is important to know that you will only move forward after this filing.
Your financial future will be in ruins forever. Credit might not come as easily, but having all of these debts weighing on your life is worse. As time goes by, your credit will start to rehabilitate and you will be able to prosper once more.
Speak with a Texas Bankruptcy Attorney
Filing for Chapter 7 bankruptcy might be an upsetting prospect, but it might be the best decision for your financial future as far as your business is concerned. With an experienced attorney on your side, you might find that this process is unavoidable and that bankruptcy might be the key to better finances for your business. At M.J. Watson & Associates, we are here for you as you proceed into the bankruptcy process in Texas, with experience in Chapter 7 filings. We will help you protect your rights during this time. Contact us to find out how we can assist you at 817-877-2861.