It is not easy keeping a business afloat in an uncertain economy. Sometimes, it takes all the income to keep the doors open. As a result, the owners are not making any money. Consider bankruptcy as an option to stay open or to close the business. Owners who cannot afford to pay their debt should consider chapter 7. This way, any business assets are sold and some debts will be paid. Partnerships, LLC’s and corporations are eligible to file. In addition, sole proprietors may file chapter 7.
It may be a good idea to consult with business bankruptcy lawyers in St. Louis. A lawyer may recommend a small business to file chapter 13. Chapter 13 is only available for sole proprietors who want to stay in business. Further, the company cannot owe more than $1,184,200 in secured debt or $394,725 in unsecured debt. A chapter 13 plan for businesses is similar to a consumer plan. The business makes a monthly payment to the bankruptcy court. In turn, the trustee pays most of the creditors. Further, the owner cannot pay the creditors less than they would receive in a chapter 7.
Some business bankruptcy lawyers in St. Louis may suggest a chapter 11. It is the only option for sole proprietors who fail to meet the chapter 13 debt limits. Likewise, it is the only plan available for partnerships, LLC’s and corporations who want to retain the business. Interestingly, this is the bankruptcy plan filed by major corporations. However, there are some special guidelines for small businesses. First, the filing is called a “small business case”. In addition, the business cannot owe more than $2,566,050 in total debt.
Additionally, small businesses must complete more paperwork than other debtors. The business must turn over a balance sheet, cash flow statement and federal tax returns. These documents must be based on the most recent transactions. Further, the U.S. Trustee’s office intensely scrutinizes small business bankruptcies, which is why owners need to listen to their lawyers. Lawyers guide them through the process and make sure no mistakes are made. Those considering bankruptcy should visit Stlbankruptcyfirm.com. Schedule a consultation as soon as possible.
