If you have come to the stage when you realize that your company can no longer keep up with payments and profits are long gone, you can choose to file for bankruptcy. This will allow you to take care of all your financial commitments legally. You may choose between four forms of bankruptcy according to your situation.
Whichever bankruptcy law you decide on and implement from the bankruptcy code, you are obliged to follow certain procedures for your debt to be considered settled. These types of bankruptcy filings are: Debt repayment (Chapter 13), Liquidation (Chapter 7), Family farmer or fisherman (Chapter 12) and Reorganization (Chapter 11). Each kind of bankruptcy is dealt with in different ways, as is your personal bankruptcy.
The Chapter 13 allows you to pay off your debts and obligations over a precise period of time, the court may allow you up to 5 year to meet up with all payments depending on your personal bankruptcy.
The Chapter 7 will allow you to refund your debts through your personal assets. This means that your properties and material goods will be evaluated by a court-appointed trustee, who will hold onto the assets while the bankruptcy procedure is taking its course. Once these assets are transformed into money, you may then use this money to pay off your personal debts. When you file for bankruptcy under Chapter 7 this will stay on your bankruptcy record for ten years, this period varies according to the your personal bankruptcy situation and type of bankruptcy you have filed for.
The Chapter 11 helps sustain companies in the reorganization of their financial management in order to improve their levels of profit. These extra profits will then be used to pay off any debt to creditors.
In the meantime, once you have filed for bankruptcy you should spend time searching for the best ways to effectively take care of all obligations and debts, either through credit repair counselling or by reorganizing the financial status of your company. A bankruptcy lawyer or attorney can help you plan a free credit repair and pull you out of this tricky situation. Bankruptcy procedures can be real brain twisters, so it could be a good idea to seek professional advice by looking for a finance analyst to help you plan an adapted financial plan, or a bankruptcy attorney to help you prepare a good credit repair strategy.
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