bankruptcy

Small business bankruptcy

June 21st, 2007 at 08:29am Under bankruptcy

When you own a small business and have never owned a business before then it would be understandable if you needed some bankruptcy help. There is nothing to be ashamed of, you may not know which section of bankruptcy to file for and we can help you. One of the first questions to be answered is your business a partnership or a sole proprietorship? If you own a corporation there are limited liabilities for companies and partnerships that are legal entities that are separate from their partners. In cases like these then, you can file Chapter 7 or Chapter 11.

If you have partners and you choose Chapter 7 then you should know that in a Chapter 7 case the trustee that is appointed by the court can sue the general partners if the partnership’s assets are not enough to pay for the entire debt. The partners could be sued by a well funded trustee suing on the behalf of all of the business creditors. If you have a proprietorship then they are pretty much just an extension of the owner and a Chapter 7, Chapter 11 or a Chapter 13 may apply.

Chapter 7 is equal to liquidation and Chapters 11 and 13 are about reorganization. How should you make the determination on which way to file? You have to look at the facts and see which avenue suits your business better. For example, if you chose Chapter 7 then once your assets are gone can you still run the business, most likely not. So if you think you have to give up the business after filing Chapter 7, you would be wrong.

If you choose to file Chapter 7 and you have a business that doesn’t require much of a start up capital then there is no reason why you could not resume that business but you can’t resume that business until your bankruptcy is discharged. Chapter 7 is appropriate when you feel that the business has no future at all. When it has a fair amount of assets or qualities that can’t be done again and lastly if you feel that the debt is way too much that trying to rebuild would be a waste of time, then Chapter 7 is for you.

If you want your business back on its feet and give it a chance to over come the bankruptcy then reorganization of Chapters 11 and 13 will be appropriate. During the filing of Chapter 11 a court appointed trustee will sit down and figure out a reorganization plan and if it is feasible she will take the recommendation to the judge that this is the way to proceed but if the trustee cannot make a connection for reorganization then they will make a recommendation that Chapter 7 be implemented.
By providing the courts with all of the necessary and legal paperwork in any filing can only help your cause. One willful mistake and things will not go your way and you will be worse for the wear.

By Add comment

Can you Avoid Bankruptcy with Debt Consolidation

June 20th, 2007 at 03:01pm Under bankruptcy

A great way to avoid bankruptcy is to go to Debt Consolidation. Debt Consolidation is the process of taking out one loan to pay off other debts. This sounds good in theory but you have to be careful. When people are in a lot of debt there credit may be on the verge of going bad so a debt consolidation officer may charge a higher interest because they consider you to be a high risk. Try to keep your interest payments low with collateral such as your car or your home. A co-signer may keep your interest down.

If you are not careful you could end up in the vicious circle again. You may get the loan but with a high interest and you get enough to repay all of your debt, but now you have clean credit cards and no payments on your car but now you have a huge loan you have to pay and some people fall back into the same trap. They may be thinking I will charge something I want so I can save the cash to pay the loan and before you know it you have amassed another credit card debt but only this time you have a loan payment.

Before you attempt debt consolidation speak to a counselor and see if it is feasible for you. If you don’t have a huge amount debt, try to get a loan for the longest amount of time. Keep your interest rates low. The real key is to understand how you got in this position and how to avoid it once you have repaid the debts with your loan. You don’t realize how many people fall into the same trap and the next time it is worse, you won’t be able to get another loan and bankruptcy will be the next step and you will have to pay the debts anyway and you will have a mark on your credit report.

Getting debt consolidation is a responsible move but you have to be responsible in handling that debt. That is one of the problems here and in most places around the world, there are some people who due to unfortunate circumstances end up in trouble and know how they got there and can correct it but there are the other people who just spend and spend and they got into trouble and even if a debt consolidation loan they more likely than not will fall into trouble again.

Do some research on debt consolidation and see if it is feasible for you. Check out the rates and the different banks or loan companies that offer them. Do the responsible thing with the loan and repay your debts and then cut up all credit cards except for one with a very low limit, under $ 1000.00 if will be easier to manage in the long run. Not only cut the card sup but contact the card companies and ask them to close your accounts. So you won’t be tempted to get another card.

By Add comment

Recent Blog Posts

Categories

Posts by Month

Blogroll