A business owner needs to recognize the benefits and drawbacks of reorganizing a venture before moving forward with this option, TulsaBankruptcyLawyers.net announces
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According to USCourts.gov, 232 businesses filed for bankruptcy in 2017, and four of the companies opted for Chapter 13 bankruptcy reorganization. Business owners often wish to know about the benefits of reorganizing their business along with the drawbacks. As requirements do vary based on the type of bankruptcy selected, it is best to consult with Bankruptcy lawyers before any paperwork is filed. This helps to ensure the entity filing for relief from debts achieves the desired end result.
“When a company files for bankruptcy, assets typically may be retained. This is of concern to a business owner who may wish to continue with his or her venture but is unable to do so as a result of overwhelming debt. Since the assets are retained, operations can continue as usual and the business owner is given time to make changes within the business to repay all or part of the debt owed and get the venture back on track,” Mary Kerr, a bankruptcy specialist with South Tulsa Bankruptcy Lawyers, explains.
To qualify for chapter 13 bankruptcy, the business must have a regular source of income and be willing to provide a portion of this income to creditors. A repayment plan is developed and must receive approval from the court before it can be implemented. The court also requires the company budget be shared to ensure the income is sufficient to meet current bills while repaying the debt.
“Business owners must be realistic when creating the budget and repayment plan. It is typically best to err on the side of caution and make the budget and repayment plan based on the lowest amount of anticipated income and the smallest payment possible. This provides the debtor with some breathing room in the event something goes wrong,” Kerr states.
When a company undergoes a chapter 13 bankruptcy reorganization, a trustee will be appointed. He or she is responsible for collecting all payments and making the payments to the creditors. Furthermore, the trustee is tasked with ensuring the company and its representative abide by the repayment plan terms. Once the repayment plan has been paid as agreed, any remaining debt is discharged. This is why many business owners refer to chapter 13 as a Fresh start bankruptcy, as they know their debt will be erased in five years or less.
“Before determining if chapter 13 bankruptcy is the right option, business owners need to understand there are drawbacks. As with any bankruptcy, a chapter 13 suit may negatively affect the credit of the business. It might be difficult to obtain credit once the business gets on solid financial ground and wishes to expand operations. Furthermore, it may take up to five years to fulfill the terms of the repayment plan. Business owners need to take this information into consideration when determining which bankruptcy option best helps with their financial difficulties,” Kerr explains.
About South Tulsa Bankruptcy Lawyers:
The Tulsa Bankruptcy Law Firm has helped thousands of residents of Oklahoma with Financial problems. Clients come from all walks of life and have gone through all types of financial hardships. The firm has helped them get a fresh financial start through bankruptcy. They can help clients file a chapter 7 or chapter 13 bankruptcy and put an end to all types of debt.
Contact Info:
Name: Mary Kerr Bankruptcy Specialist
Email: Send Email
Organization: South Tulsa Bankruptcy Lawyers
Address: tulsa, Ok, 74105
Phone: 9187398984
For more information, please visit http://tulsabankruptcylawyers.net/
Source: MarketersMedia
Release ID: 426495
