Can Your Business File a Chapter 13 Bankruptcy?
If your business is struggling with debt, can you file a Chapter 13 bankruptcy, or are you limited to other types of bankruptcy? Find out what your options are.
Is Your Business a Separate Legal Entity?
If your business was formed as a separate legal entity, you will not be able to file a Chapter 13 bankruptcy. Chapter 13 bankruptcy allows for the restructuring and reorganization of debt under a repayment plan, but is typically only available for individuals. However, there are some circumstances in which you may be able to file a Chapter 13 if you own a business.
Is Your Business a Sole Proprietorship?
If you created your business as a sole proprietorship and it is not a separate legal entity, you may be able to file a Chapter 13 bankruptcy. As long as your business is not considered its own legal entity that is distinct and separate from you, a Chapter 13 bankruptcy should be available to you. Similarly, if you are filing a Chapter 13 bankruptcy for yourself and are personally liable for some of your business debts, you may be able to include them in the bankruptcy filing.
What Are the Benefits of a Chapter 13 Bankruptcy?
A primary benefit of a Chapter 13 bankruptcy is that it does not require the liquidation of assets. This is important for individuals who have significant assets that they do not want to lose and that would not be considered exempt under a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, however, you will still owe all of your debt — you will simply have a more structured payment plan and will pay what you owe to a bankruptcy trustee. The trustee will distribute your payment among your creditors in the order of their importance.
When to Contact a Business Bankruptcy Attorney
If you are considering filing bankruptcy for your Florida business, or even if you are just having some trouble meeting your financial obligations, it’s a good idea to consult with a bankruptcy attorney to find out your legal options. In some cases, you may be able to get ahead of your debt without filing for bankruptcy. In other cases, it may be more beneficial to you to file for bankruptcy, be it a Chapter 7, Chapter 11, or Chapter 13 bankruptcy.
At the Law Firm of Joel M. Aresty, P.A., we can help. Call today for a consultation to discuss your needs in detail at 1-855 DOC LAWS.