What Type of Bankruptcy Is Right for Me?
In the United States, individuals typically have two main options for personal bankruptcy: Chapter 7 and Chapter 13. On the other hand, Chapter 11 is primarily intended for business bankruptcies. However, small businesses in Jacksonville, Florida have the flexibility to choose between Chapter 7 and Chapter 13, depending on their specific circumstances and needs.
Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” involves the sale of non-exempt assets to repay creditors. It is suitable for individuals or businesses with limited income or resources and who are unable to repay their debts. In this process, a bankruptcy trustee may sell non-exempt assets to generate funds to distribute among creditors. Once the debts are discharged, the debtor is relieved of most, if not all, of their outstanding obligations.
Chapter 13 bankruptcy, known as “reorganization bankruptcy,” allows individuals or businesses with a regular income to create a repayment plan to settle their debts over a period of three to five years. This option is beneficial for those who have a steady income but are struggling with overwhelming debt. Under Chapter 13, debtors can retain their assets while repaying creditors through the court-approved plan.
For small businesses in Jacksonville, Florida, the choice between Chapter 7 and Chapter 13 depends on their specific circumstances. They can evaluate factors such as the nature and size of their debts, income, assets, and long-term viability to determine which bankruptcy option aligns better with their goals and financial situation.
Is Your Jacksonville Business Struggling? Could a Business Bankruptcy Be the Right Answer?
Even larger corporations and businesses are experiencing financial difficulties and a decline in business. Only around 20% of small business owners achieve success, while the remaining 80% face debts and expenses and require a solution for their closed operations. If you own a struggling business in Jacksonville, Florida, a business bankruptcy could be the most viable option.
Business bankruptcies, whether in Jacksonville, Florida, or anywhere else in the USA, follow a federal court procedure specifically designed to aid the business in either repaying its debts or eliminating them under the guidance and protection of the Bankruptcy Court. A business filing for bankruptcy is commonly referred to as either reorganization (restructuring) or liquidation, depending on the chapter.