You may have a mix of business debts and personal debts that are bogging you down. With this, you may be unsure whether you should file for Chapter 7 business bankruptcy, Chapter 7 personal bankruptcy, both of these bankruptcies, or neither of these bankruptcies. You must make a well-informed decision before taking this serious step, preferably before your financial situation grows even more dire. Read on to discover the difference between business and personal bankruptcy and how a seasoned Rockland County Chapter 7 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you decipher which bankruptcy option is wisest to opt for.
What is the difference between business and personal Chapter 7 bankruptcy?
Firstly, as the name suggests, Chapter 7 business bankruptcy is an option designated for struggling business owners. More specifically, this bankruptcy type may liquidate your business in a concerted effort to pay off some or all of your business debts. Therefore, this may be in your best interest to consider if your business debt is significantly greater than your business assets; along with if your business has little to no potential for future profit even with comprehensive debt restructuring.
Then, assumingly so, Chapter 7 personal bankruptcy is for individuals who are floundering in credit card bills, medical bills, foreclosures, automobile repossessions, and other personal debts. Similar to Chapter 7 business bankruptcy, this option may have a bankruptcy trustee liquidate your nonexempt assets to pay back creditors, per bankruptcy code provisions. That said, this bankruptcy type may be appropriate if you need to stop the foreclosure on your home and you overall need a fresh start, financially speaking.
It is worth mentioning that you may only be able to combine both your business debts and personal debts into a single bankruptcy filing if you are the sole proprietor of your business. Otherwise, you may have to pick and choose.
What are the other business and personal bankruptcy options?
If neither the Chapter 7 business bankruptcy nor Chapter 7 personal bankruptcy types speak to you, you may rest assured knowing that there may be other options at your disposal.
For one, there is Chapter 11 business bankruptcy. This may be preferable if you wish to continue operating your business while receiving income, retaining employees, and the like. This is because, here, you may create a five-year repayment plan for all your business debts.
On the other hand, there is Chapter 13 personal bankruptcy. In a similar sense, this may allow you to create a three- to five-year repayment plan for all your personal debts. This tends to be the more favorable option for high-net-worth individuals who hit a financial rough patch.
So even if you are only considering a bankruptcy declaration, you must first consult with a competent Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq. Contact our firm today.
