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Mar 9, 2008

Small Business Bankruptcy

When you own a small business and have never owned a business before then it would be understandable if you needed some bankruptcy help. There is nothing to be ashamed of, you may not know which section of bankruptcy to file for and we can help you. One of the first questions to be answered is your business a partnership or a sole proprietorship? If you own a corporation there are limited liabilities for companies and partnerships that are legal entities that are separate from their partners. In cases like these then, you can file Chapter 7 or Chapter 11.

If you have partners and you choose Chapter 7 then you should know that in a Chapter 7 case the trustee that is appointed by the court can sue the general partners if the partnership’s assets are not enough to pay for the entire debt. The partners could be sued by a well funded trustee suing on the behalf of all of the business creditors. If you have a proprietorship then they are pretty much just an extension of the owner and a Chapter 7, Chapter 11 or a Chapter 13 may apply.

Chapter 7 is equal to liquidation and Chapters 11 and 13 are about reorganization. How should you make the determination on which way to file? You have to look at the facts and see which avenue suits your business better. For example, if you chose Chapter 7 then once your assets are gone can you still run the business, most likely not. So if you think you have to give up the business after filing Chapter 7, you would be wrong.

If you choose to file Chapter 7 and you have a business that doesn’t require much of a start up capital then there is no reason why you could not resume that business but you can’t resume that business until your bankruptcy is discharged. Chapter 7 is appropriate when you feel that the business has no future at all. When it has a fair amount of assets or qualities that can’t be done again and lastly if you feel that the debt is way too much that trying to rebuild would be a waste of time, then Chapter 7 is for you.

If you want your business back on its feet and give it a chance to over come the bankruptcy then reorganization of Chapters 11 and 13 will be appropriate. During the filing of Chapter 11 a court appointed trustee will sit down and figure out a reorganization plan and if it is feasible she will take the recommendation to the judge that this is the way to proceed but if the trustee cannot make a connection for reorganization then they will make a recommendation that Chapter 7 be implemented. By providing the courts with all of the necessary and legal paperwork in any filing can only help your cause. One willful mistake and things will not go your way and you will be worse for the wear.

Oral Nicholson wants to teach you the bankruptcy laws and will show you proven techniques and statergies to get you out of debt without bankruptcy. For bankruptcy information visit http://www.filing-bankruptcy.info

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