With today's struggling economy, many businesses are finding themselves swimming in unmanageable debt. When it's impossible to make ends meet any longer, corporate bankruptcy is one solution. Businesses have several options available for bankruptcy filings, and depending on your debts, corporate structure, and other factors, your company may benefit differently from each type of bankruptcy filing. Listed below you'll find a basic explanation of your business bankruptcy options, but be sure to consult with your bankruptcy lawyer for additional information and advice.
Bankruptcy Laws, Bankruptcy Lawyers In Nashville TN, Bankruptcy Chapter 7,
Chapter 7 Bankruptcy Liquidation
For companies with extreme financial difficulties and for sole proprietorships, Chapter 7 bankruptcy may offer the best resolution. In this type of bankruptcy, assets are sold off to satisfy all or part of your debts, and your company ceases operation.
Chapter 11 Bankruptcy Reorganization
Most commonly used by medium-sized and large corporations, Chapter 11 bankruptcy has been in the news a great deal recently with the highly publicized bankruptcies of GM and Chrysler. Also know as bankruptcy reorganization, Chapter 11 does not necessarily involve selling off assets. Rather, the company continues operation and goes through a structural and financial reorganization designed to help the company regain profitability. Chapter 11 can involve restructuring business debts with creditors, selling off assets to streamline the corporation, and other changes.
Chapter 12 Bankruptcy (for Family Farmers and Fishers)
This specialized form of bankruptcy is only available to struggling family farming and fishing operations.
Chapter 13 Wage-Earner Bankruptcy
Often used in personal bankruptcy filings, Chapter 13 bankruptcy can be used by sole proprietorship companies to repay debt over time. Allowing the business owner to retain ownership of assets, wage-earner bankruptcy creates a repayment schedule to satisfy creditors, usually over the course of three to five years.
For businesses suffering in today's down economic market, corporate bankruptcy may be the only way out. To ensure you make the right decision for your struggling company and to assist in filing for bankruptcy, be sure to consult an expert bankruptcy attorney in your area.
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