Many people have little to no knowledge about business bankruptcies until the time comes to file for bankruptcy as a business owner. It can be tough to figure out who is eligible to file, if bankruptcy applies to eCommerce situations, and much more. The experienced team of bankruptcy attorneys at The Law Firm of Emil Fleysher, P.A., can explain your options and when it is the appropriate time to have a lawyer become more involved.
Unfortunately, most new small businesses don’t survive, but we see it all too often. That typically leaves them faced with the difficult decision on whether or not to file for some form of business bankruptcy. A bankruptcy goes through the federal court and is supposed to help your business dissolve or repay debt. Business bankruptcies are described as either liquidations or reorganizations, which depend upon the type of bankruptcy you file.
What is Chapter 13 Bankruptcy?
Under Chapter 13, bankruptcy can be used for sole proprietorships. This is because sole proprietorships are indistinguishable from the owners. You can also utilize Chapter 13 for small businesses that desire reorganization instead of liquidation. You then file a repayment plan with bankruptcy court and detail how you plan on repaying your debts.
Overall, Chapter 13 allows proprietorships to stay in business and repay debts instead of Chapter 7, which counters precisely that.
What is Chapter 7 Bankruptcy?
With Chapter 7 bankruptcy, sometimes it is your best option when the business has no possible future. In this instance, it is usually referred to as liquidation. Whenever debts have become so overwhelming that a reconstruction is no longer an option, you can use Chapter 7 liquidation to assist you. Chapter 7 can be used for sole proprietorships, partnerships, and corporations.
One can turn to Chapter 7 whenever the business does not have any substantial assets. The Law Firm of Emil Fleysher will explain that before Chapter 7 bankruptcy is approved, though, the applicant’s income will be evaluated to see if it is over a certain level. If a Chapter 7 bankruptcy is approved, the business dissolves.
What is Chapter 11?
Any business that has the hope to turn things around needs to consider Chapter 11 or reorganization. This type of business bankruptcy is used for partnerships and corporations. Sole proprietorships can also use it with income levels too high to qualify for Chapter 13 bankruptcy.
A reorganization plan provides for payment to creditors over some time. In most cases, Chapter 11 bankruptcies take over a year to confirm a project, and not all succeed.
Contact the Law Offices of Emil Fleysher, P.A., Today
When you have questions about filing bankruptcy for your business, you must speak with an experienced bankruptcy attorney. The team at The Law Offices of Emil Fleysher, P.A., can answer all of your questions and help you begin the filing process. Call our office at 888-886-0020 to schedule a consultation with our team. We serve clients through the South Florida region when the time comes to file for bankruptcy.