What Will Happen To Your Business If You File Bankruptcy?

Business bankruptcy is a process designed to help a struggling business eliminate or repay its debts under the protection of the bankruptcy court. Depending on the type of bankruptcy filed by a business, business bankruptcies end in either liquidation or reorganization. There are three types of business bankruptcies that exist: chapter 7, chapter 13, or chapter 11.

In chapter 7 bankruptcies case, a company stops all operations and goes completely out of business. A trustee is appointed to liquidate the company's assets (split it among lenders) in order to pay off the business's debt. In essence, chapter 7 bankruptcies mean that the business is over. Only a sole proprietor can be formally discharged at the end of a chapter 7 bankruptcy; corporations and partnerships do not receive a discharge. This form of business bankruptcy is best for businesses that are overwhelmed with debt and is unable to be restructured.

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Bankruptcy - What Are the Different Types?

Have you ever gone haywire in debt? Are your creditors threatening to deal with your inability to pay up? If your answer is within the affirmative, you may need to become well informed concerning the topic of bankruptcy and its legal status today. Ignorance on the law is in no way an excuse; hence you will need to know what to do when you're drowning inside the ocean of debt.

Indeed, the term "Bankruptcy" is usually a legal term utilized to describe the inability of an individual to spend his or her creditor. It also refers to the inability of a firm or organization to pay up its creditors. In most instances, your creditor may possibly be a bank, a financial business or even a wealthy person from who you borrowed some funds. Bankruptcy as a legal issue might be involuntary when your creditor initiates the legal action against you. On the other hand, it could be voluntary when you're the initiator.

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Solve Your Problems with an Attorney Bankruptcy

If you, as an individual or as an owner of a business, have debts or other financial troubles, an attorney bankruptcy can be the ideal solution. Whenever how difficult and complicated a financial case can seem, attorney bankruptcy is the one you need.

Attorney bankruptcy is specialized in solving financial situations, providing necessary information about the bankruptcy law and legal methods to solve financial cases. You can benefit from the knowledge and experience of an attorney bankruptcy either solving debts issues or developing court-approved reorganization plans that suppose the presence and involvement of debts and creditors. There are some ways in which attorney bankruptcy solve credit problems and one of them is discharging debts by liquidating assets that are personal or belonging to a commercial enterprise. The assets or non-exempt property are turned into cash and distributed among creditors so that the difficult situation is solved. A discharge notice is received by the debtor after these proceedings.

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Will I Be Able to Keep My House If I File for Bankruptcy?

The answer, to this questions, depends upon what chapter bankruptcy you file and whether or not you are behind on your mortgage payments. If you are behind on your mortgage you can not save your house from foreclosure by filing a chapter 7 bankruptcy. However, you will be able to delay the foreclosure for a few months. So, when a chapter 7 is filed you will be able to live rent and mortgage free for around three months. But, the mortgage holder will eventually foreclose on your property.

When filing for a Chapter 7 bankruptcy, if you are up-to-date on your mortgage payments, you maybe able to keep your house. The ability to keep your house is dependent upon whether or not you filed for a homestead exemption. A homestead exemption allows you to save your house from the trustee when bankruptcy is filed. However, the maximum amount that can be saved, via a homestead exemption, varies from state. So, you need to contact a local attorney to find out the exact amount of your particular states homestead exemption.

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Is There Credit After Bankruptcy?

FUTURE CREDIT - One of the most frequent questions I receive as a Bankruptcy lawyer, is "How will Bankruptcy affect my future credit?" It is true that credit records are very important and getting more important every day. Many employers have started requesting credit reports, and certainly credit is necessary to purchase a house and in most cases a car. That is why I usually don't recommend filing bankruptcy if you have good credit. If you can avoid "ruining" your credit, you certainly should! Bankruptcy will bring down the infamous FICO credit score by at least 100 points immediately... but sometimes it can raise the FICO score by the same amount. Usually, within a year or so after the bankruptcy is over, and the Discharge is received, an individual's credit score is better than it was than before he or she filed bankruptcy.

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When Bankruptcy Isn't an Option

Chapters 7 and 13 of the United States Bankruptcy Code offer individuals and families in our country with sweeping debt relief, but for many this approach is not an option. Whether you are concerned to avoid the negative credit consequences of a bankruptcy filing or if you would prefer to attack your problems with debt from another angle, there are several other strategies which may work for you.

Bankruptcy makes it possible for a debtor to discharge most or even all unsecured debts, as well as potentially freeing up financial resources to catch up on secured loans such as a home mortgage. It is perhaps the most immediate and comprehensive form of debt relief available, but it also brings negative repercussions-bankruptcy can negatively influence your credit for up to 10 years, making it difficult, though not impossible, to secure a loan in the future. For some, this is enough to keep them from choosing to take this course of action. Others would prefer to resolve their debts without bankruptcy as a matter of principle, and still others may be swamped in debt but do not yet feel desperate enough to decide that bankruptcy is the necessary approach.

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How Does Chapter 7 Bankruptcy Work?

Persons generally resort to Chapter 7 bankruptcy to entirely discharge them of their debts forever. Individuals who qualify for Chapter 7 bankruptcy have demonstrated the court that they have no realistic way to pay their debts over the course of the next three to five years. The only way out to pay one's debts is for him to sell all of his possessions. But then again, with assiduous planning, a Chapter 7 borrower is rightfully exempted from having to recompense any unsecured debts, and most debtors are able to save all of their possessions.

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