What happens after you declare bankrupcy?

Question

My husband's company is in dire straits. He says they may have to declare bankrupcy. What's the difference between chapter 7 and 11? He is almost 60 years old, needs to have both his knees replaced soon due to injuries from the War. He is very smart and has a lot of business experience, but what will he do to support the family? I am doing the most I can with 3 kids to raise but have no means to make the kind of money he used to. Has anyone declared bankrupcy out there?

Answer 1

Is this a corporation or sole proprietorship? There are differences in bankruptcy. Chapter 7 is a total liquidation of the business. This is a last result. However, for businesses creditors can force a business to file Chapter 7.

If you can get Chapter 11, it will be cheaper and the ability to negotiate your debts down.

Answer 2

Corporate bankruptcy is very different from consumer bankruptcy. Chapter 7 is a complete discharge bankruptcy. You state all debt which includes good debt and bad debt. You have to list all accounts either open or closed for the purpose of showing your outstanding debt compared to your income. If you have anything open when you file a Chapter 7 it is automatically closed by the credit grantor. This includes checking accounts. The reason for this is that if you cannot pay ANY of your creditors, (which is the purpose of the Chapter 7) then you dont need anything open. After a Chapter 7 which is a complete discharge you have nothing owed to anyone. Be careful of creditors that ask you to either reaffirm your loans with them or if there was a creditor involved with secured propertiy like a car. These creditors have a loop hole that could cause you to still owe their debt even after the discharge. when you have a repo there is a deficiency balance that is owed. Usually. Well if they reposess when you begin your bankruptcy and have filed, they usually are listed as a secured claim because of the car. Well once the car is gone then they are no longer a secured creditor. You have to be sure to include them in both schedules of the Bankruptcy. If you dont they can post a claim for the unsecured portion after you discharge and ruin the whole thing. So after a bankruptcy you would have a charged off debt and set you back even farther. Thats all on a 7 unless you want to email me and I can help you further. On a Chapter 11, it is set up similar to a Chapter 13 for the consumer. It is like a debt consolidation without the home loan and your servicing is through the bankruptcy courts instead. Chapter 11 is a restructure of debt. Restructure or consolidation same difference,. The court can determine what percentage of that debt should be repaid based on how established the company is and if they can recover vs. if they are folding and wish to file and then reopen under different statistical information. Not too many things to watch for here other than making sure the creditors are applying the payments they receive from the bankruptcy court.

Answer 3

Businesses file under Chapter 11 bankruptcy. This allows them to retain their hold over their assets. The debts are repaid over a period of few months to few years. This type of bankruptcy is meant for restructuring debts and hence can be quite complicated. Use the services of an expert attorney while filing under this type.

Answer 4

uncertain why you're making the direct connection. useful those in BK are in economic misery, yet many people who record BK have jobs, purely too many expenses, or some existence adventure that motives issues. somewhat submitting financial disaster might stay away from some people from dropping their abode or being evicted. So no, submitting BK won't render the filer homeless. there will be a million.4 million BKs this 300 and sixty 5 days. a>

Answer 5

Take Chapter 11 if you can and talk the creditors down to a dime on the dollar. I know someone who did that and they are back on their feet now. Sadly, it took her 10 years to recover, but her and her family survived.