Business-Bankruptcy.com is a service to help small business owners get out of debt and avoid bankruptcy. If you're considering bankruptcy for your business, consult an experienced and qualified bankruptcy lawyer.
Don’t Be Daunted By Those Business Bankruptcy Facts And Figures
A lot of businesses file for bankruptcy because of a number of reasons such as incapacity to pay business debts, needing more time to gather funds to pay debts or having unsuccessful product lines. Businesses hire bankruptcy attorneys to take control of the bankruptcy process, which could fall either under Chapter 7 or Chapter 11. A Chapter 7 bankruptcy is a liquidation, while a Chapter 11 bankruptcy is referred to as business reorganization. When the entire business bankruptcy process is through, the business becomes free of debts. The following are some of the business bankruptcy facts that you should know about:
1. There are debts that fall under priority debts. You cannot just avoid paying these debts or pay them in parts. The business owners are personally liable for debts like taxes, alimony, child support, student loans, court fines or penalties, criminal penalties imposed by the law, debts on account of injuries caused to others while driving under the influence of alcohol or drugs. The best business bankruptcy lawyers cannot help you with such priority debts.
2. The small business can only seek protection from debts that arose before the business filed its bankruptcy petition. Those debts that were obtained after the date of the filing of the bankruptcy petition could not be covered by the bankruptcy protection laws.
3. Clients are advised by business bankruptcy attorneys to list every debt incurred according to their schedule. If a debt is not listed, it cannot be discharged by the bankruptcy process.
4. If it is discovered that the business owner received any asset, including money, by fraud, then the debt will not be discharged by the court.
5. The court can deny the debt discharge in the event that it discovers an act of dishonesty by the business owner. Example of dishonesty could be lying, falsifying records, destroying property or records, destroying assets, disobeying court orders, etc.
6. Business bankruptcy lawyers can only help obtain a Chapter 7 discharge once in 8 years.
7. When the court discharges debts that are secured by an asset, like lien on an office building, it does not necessarily mean that the debt has to be paid in cash. The financial institution that holds the lien can take possession of the property and then sell it.
8. There are instances when the debtor may like to continue paying a debt even after the court has already discharged it. For example, if a business owner has obtained a loan for the purchase of a car and this loan has been discharged by the court, then the business owner can enter into a “Reaffirmation Agreement” with the lender and continue paying his debt (mainly because he needs the asset. The court supervises this type of agreement.
These are certain facts you have to be aware of before contacting or choosing from the best business bankruptcy lawyers.
Small business owners seldom consider bankruptcy unless serious financial pressures exist. If your business has slipped behind with creditors and you’re considering chapter 11 bankruptcy, there are additional solutions like business debt consolidation or debt management. Consider all options before filing for business bankruptcy.
