When businesses have overwhelming debts, they may declare bankruptcy and go out of business. However, they can also save their businesses and reorganize their finances under some bankruptcy laws. If you own business in Kansas, you should be aware of business bankruptcy laws.
Types of Business Bankruptcies
Filing a business bankruptcy depends on how the business was set-up, whether it’s a sole proprietorship, partnership, a limited liability corporation (LLC), or a corporation. There are three types of bankruptcies businesses can file:
* Chapter 7
* Chapter 11
* Chapter 13
Business bankruptcy lawyers in Topeka, KS can assess the financial situation of your company and determine which type of bankruptcy should be filed.
Chapter 7
This bankruptcy is known as a liquidation bankruptcy for businesses because the debts are too overwhelming to stay in business. If business bankruptcy lawyers determine your business has no future, this is the type of bankruptcy they will file.
Chapter 11
A chapter 11 bankruptcy should be filed if the business can reorganize its debts and continue to operate. Farmers can also use a chapter 11 and 12 bankruptcy to organize a pay back plan for their debts and continue to operate.
Chapter 13
Although a chapter 13 bankruptcy is typically for consumers, people who have sole proprietorships can use it as well. They can reorganize their debts and file a repayment plan for debtors. They may not need to repay everything because the amount depends on how much you owe, how you much you earn, and if you own any property.
Good business bankruptcy lawyers can show owners of sole proprietorships how they can save their homes and other assets by filing a chapter 13 since their personal assets are usually in their businesses.
If you own a business which is in debt, get free consultation about filing bankruptcy.
