Benefits of business bankruptcy in Florida
Most people think of bankruptcy as a scary thing that should be avoided at all costs. However, for some small businesses, bankruptcy may be a way out from under crushing debt and limited income. By filing, it may be possible to retain some or all of a business owner’s property while also keeping the company running. The form of entity that the business is and whether staying in operation is possible depends on the type of filing made.
Sole proprietors may file for either Chapter 7, Chapter 11 or Chapter 13 bankruptcy. If a sole proprietor does decide to file under Chapter 13, the business debt is reorganized and repaid pursuant to a court-approved plan over a period of three to five years. Corporations are not eligible to file for Chapter 13 and must file under Chapter 7 or 11.
Reorganizing debt under Chapter 13 is ideal because it allows filers to keep their assets. Once the repayment period is over, the remaining debt is discharged. Reorganizing debt is also ideal if it allows the business to stay open assuming it has shown the ability to make a profit. If the business isn’t viable, the owner can walk away with as little financial damage as possible.
Those who are thinking about filing for Chapter 13 bankruptcy may want to have obtain legal advice before so doing. A bankruptcy lawyer can provide more insight about the process and all the benefits a small business owner may realize. One benefit of filing is that it will put a halt to creditor harassment, giving a business owner more time to prepare the repayment plan and submit it to the trustee for its approval.