Whether the result of poor investments, faulty management or economic downturn, thousands of businesses fall victim to financial hardships each year. How the owners proceed once they realize the extent of their problems should depend on a number of factors. With the help of a qualified attorney, business owners can determine the best course of action for themselves, their families and their companies.
Among the options available for Small Business Bankruptcy in Indianapolis, IN is Chapter 7. This type of bankruptcy assumes a course of liquidation. A trustee is appointed who will sell the company’s assets in order to repay as many outstanding debts as possible. Any debts the funds raised through liquidation can not cover will be discharged. Since this chapter virtually eliminates any assets the business holds, it is typically reserved for those with no hope of recovering from their financial challenges.
The next alternative is Chapter 11, in which financial reorganization is the plan for recovery. Far more flexible than Chapter 7, business owners using this approach are allowed to continue operating their company. They create a plan for repaying their debts, which will be overseen by a trustee who is appointed by the court.
In rare cases, Chapter 12 comes into play. If the business in question is a family farm or family owned company within the fishing industry, the owner may be able to file for Chapter 12. They are able to make monthly payments to repay their debts without losing their business, providing they follow their repayment plan as agreed.
Chapter 13, though usually sought after by families rather than businesses, can be taken advantage of by business owners who have considerable personal assets invested in their company. Also a reorganization type of bankruptcy, Chapter 13 requires a debt repayment plan be submitted to the court. Under this chapter, a business owner may be allowed to keep his home and certain other belongings connected to his business.
If a business is failing due to an injury or illness, the owner may consider speaking with a Social Security Disability Attorney in Indianapolis, IN before seeking bankruptcy. A successful disability claim could provide the finances necessary to save the business without resorting to bankruptcy. Otherwise, speaking with an attorney regarding Small Business Bankruptcy in Indianapolis, IN can help decide which chapter is appropriate or if bankruptcy may not be the answer in any form.
