The crisis in the current economic scenario affects the business sector, combined with poor financial management and accumulation of debts, companies, and institutions are often forced to declare bankruptcy. This is usually the last thing a business person would like to do but finds this is the only solution to comply with the payment of debts to their creditors.
Depending on the type of bankruptcy you file will determine if the business will stay open and continue operations. Chapter 11 or Chapter 13, depending on your business’s size, is a reorganization type of bankruptcy, allowing the company to continue to operate. Your loan terms are usually restructured to ease the burden of making the payments. The court assigned trustee will collect a monthly payment from the petitioner and distribute the money to the business creditors for past payments.
Chapter 7 bankruptcy will liquidate the business assets to be sold and pay what is collected to the creditors. This type of bankruptcy will close down the business. From the creditor’s point of view, he may have recovered some of his losses concerning the company that went bankrupt thanks to the bankruptcy proceedings.
If you are struggling to keep the doors open or would like to close the doors legally and have all debts paid, contact a Plano bankruptcy attorney to find out what options you may have.