Save Your Business BY FILING CHAPTER 7 BANKRUPTCY
When your business is in trouble you will do what ever it takes to save it. That being said, there are some options when it comes to financial instability and to financial issues regarding your business. ame. CHAPTER 7 BANKRUPTCY IS AN OPTION THAT CAN HELP TO SAVE YOUR BUSINESS AND GET YOU BACK IN THE G
What type of Business Can File For CHAPTER 7 BANKRUPTCY IN THE STATE OF CALIFORNIA?
It is helpful to first look at what chapter 7 bankruptcy is. Chapter 7 is often used by businesses that do not want to liquidate and that prefer instead to stay in business and restructure. WITH A CHAPTER 7 CLAIM, THEY DO OFFER THE OPTION TO LIQUIDATE ITEMS THAT ARE NON-ESSENTIAL TO THE BUSINESS TO HELP PAY BACK THE DEBT AND TO PREVENT THE BUSINESS FROM SHUTTING DOWN.
FOR THE MOST PART, THE OPTION TO FILE A CHAPTER 7 BANKRUPTCY IS RESERVED FOR SMALL BUSINESSES AND FOR THOSE SMALLER BUSINESSES THAT HAVE A MUCH SMALLER BASE AND THAT ARE OWNED BY ONE PERSON RATHER THAN LARGER, FRANCHISED BUSINESSES.
Chapter 7 Filing for a Small Business SOLE PROPRIETOR
CHAPTER 7 IS OFTEN REFERRED TO AS LIQUIDATION BANKRUPTCY. THIS MEANS THAT SOME OF THE ITEMS THAT ARE PRESENT ARE USED FOR BANKRUPTCY AND FOR HELPING TO SETTLE SOME DEBTS.
IN SOME CASES, THIS IS THE BEST OPTION FOR THOSE BUSINESSES THAT MIGHT NOT BE ABLE TO CONTINUE ON OR THAT ARE GOING TO TAKE A BREAK AND TRY AGAIN LATER WHEN THEIR FINANCES ARE A BIT MORE STABLE.
THIS TYPE OF BANKRUPTCY IS BEST WHEN THERE ARE NO MAJOR ASSETS IN THE BUSINESS LIKE A BUILDING OR A TON OF PRODUCT THAT IS SITTING AROUND AND THAT NEEDS TO BE SOLD OR USED UP.
IF SOMEONE HAS A BUSINESS FOR INSTANCE WHERE THEY PROVIDE A SERVICE OR THEY PROVIDE A SKILL, IT IS GOING TO BE MORE BENEFICIAL TO FILE A CHAPTER 7 BANKRUPTCY THAN IT WOULD BE TO ATTEMPT TO PAY OFF ANY DEBT AND KEEP THE BUSINESS OPEN.
How Can We Keep the Business in a Chapter 7 Filing?
WHEN A CHAPTER 7 FILING IS PUT INTO MOTION A TRUSTEE IS APPOINTED TO HELP SELL OFF ASSETS THAT CAN BE USED TO PAY OFF THE DEBT THAT HAS ACCUMULATED.
THIS MEANS THAT THE TRUSTEE IS GOING TO SELL ANYTHING THAT IS NOT EXEMPT SO THAT THEY CAN TRY TO GET BACK AS MUCH OF THE MONEY THAT WAS LOST AS POSSIBLE.
IF YOU WANT TO KEEP THE BUSINESS AND POTENTIALLY START OVER OR USE THE IDEA AGAIN, YOU WILL WANT TO MAKE SURE THAT YOU LIST THE BUSINESS ITSELF AS AN EXEMPTION.
THERE ARE SOME COMMON ITEMS OR ASSETS THAT ARE CONSIDERED TO BE EXEMPTIONS OR THAT ARE USED AS EXEMPTIONS AND THEY CAN BE THE BUSINESS ITSELF, THE OWNERSHIP INTERESTS LIKE ANY STOCK OR SHARES IN THE COMPANY, AND EVEN THE EQUIPMENT THAT WAS USED TO MAKE THE BUSINESS OPERATIONAL.
Chapter 7 filing Procedure for Businesses in California
IT TAKES ABOUT 6 MONTHS IN TOTAL FROM START TO FINISH. YOU WILL FIRST MEET WITH A BANKRUPTCY ATTORNEY TO SEE IF YOU QUALIFY FOR CHAPTER 7 BANKRUPTCY. YOUR ATTORNEY WILL HAVE TO PETITION THE COURT TO ALLOW YOU TO FILE FOR CHAPTER 7 AND TO MAKE SURE THAT THE BUSINESS OR THE PERSON THAT IS FILING FOR THIS TYPE OF BANKRUPTCY IS INDEED QUALIFIED TO FILE CHAPTER 7.
THE NEXT STEP WILL BE TO NAME THE EXEMPTIONS ONCE YOU HAVE BEEN APPROVED. THIS MEANS THAT YOU WILL WORK WITH YOUR LAWYER TO LIST WHAT YOU WANT TO KEEP EXEMPT FROM THE FILING. THIS CAN BE THE BUSINESS ITSELF, THE EQUIPMENT USED FOR THE BUSINESS, AND EVEN THE OWNERSHIP INTERESTS IN THE BUSINESS.
AFTER EXEMPTIONS HAVE BEEN FILED, THE SELLING OFF OF ASSETS WILL BEGIN. YOUR CHAPTER 7 ADVOCATE OR BANKRUPTCY TRUSTEE WILL WORK TO SELL OFF ASSETS THAT CAN BE SOLD OFF TO MAKE BACK MONEY THAT WAS LOST.
FOR INDIVIDUALS THAT ARE THE SOLE PROPRIETOR OF THE BUSINESS, YOU CAN ALSO ROLL IN YOUR OWN DEBTS TO HAVE THEM SETTLED ALONG WITH THOSE OF YOUR BUSINESS. IT IS IMPORTANT TO TAKE THE TIME TO DISCUSS THE PROCESS FULLY WITH YOUR LAWYER AND TO TAKE THE TIME TO LEARN ABOUT WHAT IS BEING DISCHARGED AND WHAT THE OVERALL PROCESS WILL LOOK LIKE FROM START TO FINISH.
If you have any questions then consult with our experts at Berneman Law Firm. Call at – 8054927045, 8776200044 (Toll Free – 882004443)