What is Bankruptcy?

We all struggle from time to time to meet deadlines and repay money and loans that we have taken out. When starting a business or through the course or owning that business debts tend to rack up fairly quickly. What might be a small issue for an individual can easily become a huge debt for a business in a matter of months?

Bankruptcy is a legal process by which the debts of a person or a business are excused or defaulted on and the person or business is no longer responsible for the repayment of that loan or outstanding balance. IN most cases, a bankruptcy involving a business is also going to include liquidation of assets, selling off what can be sold to help repay as much of the loan as possible, and working to reaffirm those loans that are necessary to either keep the business going or to close it entirely.

With businesses, bankruptcy can be especially tricky in Chicago or anywhere else, mainly in cases where more than one person is involved in the running and finances of a business. In terms of business bankruptcy, the business is going to be bankrupt rather than the person in most cases and in the type of bankruptcy that is most common for businesses.

It is always best to have a Chicago bankruptcy attorney on your side to help you navigate through the process and make sure that the right debts are excused and the right debts are affirmed if any remain. Knowing what type of bankruptcy you should be filing, what is going to benefit you and your business best, and what you need to do to both start and complete the process is essential.

Our Chicago bankruptcy lawyers can help you to get your proceeding underway and can help you to get off on the right foot and back on the road to financial success and recovery. For those looking for a great law firm in Chicago, we can help with all your needs.

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What Types of Debt are Discharged?

There is a range of different bankruptcy types and there is a big difference in the types of debts that are discharged under each type. When a business files for bankruptcy they are going to be dealing mainly with the expenses directly associated with the business. This means that the student loan you took out to go back to cosmetology school is not going to be something that can be discharged when a business files for bankruptcy.

When filing for this type of proceeding you’re able to discharge a great deal of debt as an individual if you are filing for yourself and as a business for those that are filing on behalf of a business that they own. For individuals, you can discharge credit card debt, personal loans, car loans (while returning the car of course), mortgages, and other personal consumer debt that you have racked up.

When it comes to a business, in most cases you are required to sell off as much as possible to help settle the debt before the rest can be forgiven. There are certain types of debt that cannot be discharged for anyone under any circumstances. You cannot discharge student loans, recent taxes both local and federal, debts for personal injury caused while the debtor is intoxicated and driving a motor vehicle, debt incurred through frauds, criminal restitution, child support, alimony, parking tickets, and fines.

On top of those that are listed above, you are also not able to discharge on those loans and debts that are not listed in the proceeding. This is why legal services and a great bankruptcy attorney are so important when it comes to your bankruptcy proceedings and making sure that all the right boxes are checked. Making sure that your debts are all clearly outlined, that they are clearly listed and that your bankruptcy is thorough and to the point.

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Are There Different Types of Bankruptcy?

There are different types of proceeding for your business and for your individual proceeding as well. Chapter 7 bankruptcy, Chapter 13 bankruptcy, and Chapter 11 bankruptcy are all used in business proceedings in terms of discharging debts. In Chicago, these types of bankruptcy are going to be varied based on what you need them to do.

Chapter 7 bankruptcy is a proceeding in which the assets of the business are going to be liquidated. With Chapter 7 bankruptcy all the assets that are part of the business are liquidated and then the balance is applied to the debts that are outstanding before the final debt is discharged. This is most common in cases where the business is being dissolved entirely and where it is not going to be working or functioning after the fact. Finding a good law firm in Chicago can help you to handle your Chicago proceeding as quickly and easily as possible.

With Chapter 7 bankruptcy you are going to be returning items that can be returned, selling off items and properties that you own, and then working to make sure you are repaying what you can before the proceeding goes on. With Chapter 7 bankruptcy it is always best to make sure it is the right option and that you are not going to be disappointed with the outcome.

With Chapter 13 bankruptcy, the most common type of business bankruptcy for those that want to keep running and that want to simply reaffirm loans and move things around, this is also referred to as adjustment of debts for individuals that have a regular income. This is often used for sole proprietorship businesses as when a sole proprietorship is set up, the owner and the business become one. Chapter 13 is often used when the goal is not to completely disband or close the business, but rather to simply reorganize it and change it around a bit. With this proceeding you can reaffirm some debts, you can change your debt, and you can create a repayment plan to help keep your business afloat.

The last type that is involved with the business is Chapter 11 bankruptcy. With Chapter 11 this is also referred to as reorganization. This can be used in terms of businesses that are partnerships, to begin with, and then are dissolving and the business is staying open and operating. With this type of proceeding you are going to reaffirm certain debts, liquidate others, and then also are going to help to keep the business running under a trustee to make sure that the business is going to keep working well and keep from incurring more debt. This also helps to dissolve partnerships and helps to release someone from their part in a business. With the help of the right Chicago lawyer or law firm, you can get the proceeding underway quickly and easily.

Can Businesses File for Bankruptcy?

Businesses can file for bankruptcy. A business bankruptcy attorney will work with the business owner to determine the likelihood of continued operation of your business and the type of debts owed by the business or by the individual business owner.

A good bankruptcy lawyer will be able to help you determine what type of proceeding is going to work well for you and provide sound legal advice from start to finish.

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The Bankruptcy Process

The process for filing either Chapter 7, Chapter 13, or Chapter 11 is all going to be similar. The first step is to get legal advice and talk to a lawyer about what you can do to get those debts discharged and keep on either running your business or close it entirely. Your bankruptcy attorney can help you to list your debts so that you can make sure they are all discharged in the bankruptcy proceeding.

You are also going to be asked to list your assets so that the bankruptcy court can determine which assets will be liquidated during the bankruptcy case. A lawyer can tell you just what assets will be liquidated, your rights and obligations under the U.S. Bankruptcy Code, and what you need to do to get your Chicago bankruptcy off to a good start and your debts discharged.

With a company that does have to file for bankruptcy, it is always going to be best to get a lawyer or an attorney for bankruptcy that understands the different chapter types, that understands how your particular business works, and that can help you with your debt relief from start to finish. Debt is not something that you have to be afraid of, with the right bankruptcy law education and the right bankruptcy lawyers, you can complete your proceeding with relative ease and can get back on track.

What Type of Help Do I Need When Filing For Bankruptcy?

If you live in the Chicago area, you have a Chicago business, or you are filing for bankruptcy in Chicago, you do want to find a lawyer, based in Chicago to meet your needs. Contact us today to set up an appointment and to find out what you need to do to get your Chicago bankruptcy started.

With the help of a good Chicago law firm, you can get the results you want and need and can help start to manage your debts and get your business back up and running. No matter where you live, making sure your bankruptcy follows the laws and regulations in your area is a must.

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