Personal and Business Bankruptcy
The kind of bankruptcy that you file for will depend on many different factors. The main factor being whether or not you are an individual or you are filing for a business entity. The ways that these bankruptcies are set up will have different ways of managing debt for these different circumstances. You will be required to qualify for bankruptcy, meaning that just because you can’t pay your debts and want to go bankrupt, doesn’t necessarily mean that you meet the requirements.
When you file for personal bankruptcy, you are most likely going to lose some of your property as a part of the bargain. This is because some or all of the property that you own will be used as a form of payment to pay off the debt that you owe. Some types of property will not be seized and are exempt from this process. This kind of property is considered necessities such as a vehicle, clothing and household items and maybe even some portion of your home equity. If you own multiple vehicles or homes, have expensive collections of items or antiques, then those might be subject to liquidation.
If you have already filed for bankruptcy within a certain timeframe, then you probably will not qualify for bankruptcy. Especially not if your case was dismissed for a number of reasons like not showing up in court or for refusing to follow orders that were given to you by the judge. For your case for bankruptcy to be heard, you will have to complete some classes about credit and taking care of finances so that you are aware of the serious decisions that come with filing for bankruptcy. With personal bankruptcy, a discharge is only available to people, not businesses.
In order to file bankruptcy for your business, you will need to file a petition in court. This petition will include several different pieces of information regarding your assets, debts, income, expenses and any contracts or leases. A statement of your financial situation will need to be included as well, in addition to completing a credit counseling and bankruptcy related class. Your tax information, such as your tax returns will be investigated. The process is very similar to filing as an individual, with more emphasis on the finances of your business.
There are some advantages that go along with filing for bankruptcy as a business. You will not be required to liquidate your assets. Other advantages include rescheduling payments that you owe and potentially even lower your payments. This kind of bankruptcy will also protect you from the actions of collectors and basically acts like a loan.