A business can qualify for a chapter 13, chapter 11, or a chapter 7 under the bankruptcy code. The chapter 13 business bankruptcy is for DBA’s and unincorporated businesses with less than $383,000 of unsecured debt and less than $1,149,525 of secured debt. The chapter 11 business bankruptcy is for a business or an individual who are above the debt caps for Chapter 13 bankruptcy or are incorporated. Any individual or entity can file a Chapter 7 bankruptcy, although the discharge is not a certainty. Chapter 7 bankruptcy liquidates all business assets, if the business has assets. A corporation does not get a discharge in a chapter 7. Thus, the goal of chapter 7 for a corporation is to stay the collection of the creditors and have the trustee pay them from the assets of the corporation. If the corporation has no assets to liquidate, then the bankruptcy is dismissed in a chapter 7, and you may be liable for sanctions or attorney fees of the chapter 7 trustee. What typically happens to the business owners in a chapter 7 is that they simply open a new business down the road and walk away from all the corporate obligations. Chapter 11 allows a company to negotiate and restructure debt with creditors with the goal of keeping the company doors open and eventually repay all obligations. The chapter 13 is similar to a chapter 11 but the attorney fees, costs, and procedure is simpler.
Business debt records for the last two years
Business bank statements for the last two years
Profit/loss statement for the last two years
Business tax returns for the last two years
Business assets list for the last two years
Come to our office for an initial consultation
Choose which chapter of Title 11 bankruptcy code you will file.
Prepare the bankruptcy schedules and supporting documents based on the information you have provided to our firm.
File the petition with the courthouse along with all the supporting credit, assets and income information.
Notice will go out to the creditors informing that you have filed for bankruptcy.
Follow directions and attend consequent meetings of the bankruptcy trustee and your attorney. The process may take several months to complete. Be patient and comply.