On Behalf of developers | October 8, 2024 | Bankruptcy,Chapter 13 Bankruptcy,Chapter 7 Bankruptcy
Small business ownership is tough and there’s nothing more difficult than having to consider bankruptcy. If you are a small business owner in Mississippi facing instability and trying to manage overwhelming debt, as unpleasant as it may be to consider, filing for bankruptcy may be your best option. It may enable you to walk away without lifelong, haunting debt. If this is a possibility for you, it’s important to be well-versed in the various options and make informed decisions throughout the process. That’s where Pond Law Firm enters. We’re here to guide you every step of the way, starting with helping you weigh your bankruptcy options.
What are the different types of bankruptcy for LLCs, corporations, partnerships, and other business formations? Business bankruptcy options are similar to those of individuals with a few variations. Mississippi businesses can file for Chapter 7 bankruptcy and Chapter 11 bankruptcy. Sole proprietorships are slightly different, allowing the individual owners to file for Chapter 13 bankruptcy.
Chapter 7 Bankruptcy for Businesses
This type of bankruptcy is known as the liquidation bankruptcy. If your business is to the point where it can no longer operate and you know you’ll need to close and take care of your debt, this is the best option. When you file for Chapter 7 bankruptcy as a business, the process begins with your business closing, ceasing all operations. A court-appointed trustee oversees the entire process as you sell off all the business assets and use the funds to repay your creditors. After everything is sold off and the proceeds are distributed among your creditors, any remaining unsecured debts are discharged, leaving you to move on with your life.
Chapter 11 Bankruptcy for Mississippi Businesses
Chapter 11 bankruptcy is a better choice for businesses that will be able to continue operating while also paying off debt. Known as a reorganization debt, this type of business bankruptcy enables you to renegotiate payment terms with your creditors, restructure debts, and cancel or modify contracts, remaining operational all the while. After negotiating these terms, you will begin a court-approved repayment plan to pay off creditors. If your company has a good chance of staying in business but has overwhelming debt, Chapter 11 may be a good option for you.
Chapter 13 Bankruptcy for Small Businesses
For sole proprietorships, Chapter 13 bankruptcy may be the best option for you if you find yourself facing overwhelming debt. Similar to Chapter 11 but designed for individuals, Chapter 13 is also available to small business owners. This process enables you to reorganize your business debts. You will renegotiate terms with creditors, develop a repayment plan, and pay your debts back over 3-5 years, as approved by the court. You will retain your personal and business assets and can stay operational if you are able and so choose. Chapter 13 is a viable option for your small business if you’d like to avoid liquidation and retain control of your business.
After decades of helping small business owners in this position, the team at Pond Law Firm knows how scary and sad it is to face this possibility. We want you to know you’re not alone in the process. We provide compassionate support and guidance to help you navigate the complexities of bankruptcy and our team protects your best interests. We assist you in successfully resolving debt so that you can move on with your life and perhaps even save your business. Contact Pond Law Firm today for experienced assistance with your business bankruptcy.