The idea of bankruptcy seems easy enough, but there is far more to it than what meets the eye. Bankruptcy is the process of allowing individual people or businesses to be free of their built up debt, while also structuring some form of repayment to the creditors following up on the outstanding debt. It gives individuals and businesses a new beginning. Bankruptcy cases are handled at the federal level as outlined by the U.S. Bankruptcy Code.
The U.S. Bankruptcy Code also outlines the different types of bankruptcy that can be filed—these are named after the chapter they are listed under in the code. Three of the more commonly used bankruptcy filings are Chapter 7, Chapter 11, and Chapter 13. Chapter 7 is an option for both individuals and businesses in which the primary focus is liquidating assets. Chapter 11 is seen mostly with businesses, and centers on reorganizing the company to help it become profitable again. Chapter 13 acts as a repayment plan for individuals with consistent enough income to follow an installment plan.
When considering bankruptcy, whether as an individual or for your business, the first thing you should do is speak with an attorney that is experienced with navigating bankruptcy. The team at Evans & Mullinix has the knowledge and understanding to help you achieve a realistic outcome.
