Bankruptcy is always a complicated process, so it helps to understand which Chapter is the right option for your financial circumstances. There are a number of differences between Chapter 7 and Chapter 11. Sometimes, the former is preferred over the latter in order to liquidate a business.
If you are concerned about the viability of a business, filing Chapter 11 may not provide a permanent solution to your problems. It is important to consider how your business reached its current financial state and whether reorganization is able to correct the course of the business. In such instances where the business is no longer viable, business owners may opt for Chapter 7 bankruptcy, completely liquidate the business and close up shop.
In order to get a better idea of whether Chapter 7 or Chapter 11 bankruptcy is the better option for you as an individual or business, it is beneficial to consider the main elements of each Chapter.
Chapter 11 Bankruptcy
A Chapter 11 bankruptcy is designed to allow individuals, couples or businesses to reorganize finances. If you are filing for Chapter 11, you must have sufficient resources to sustain payments over a period of time in a repayment plan. Assets are retained in a Chapter 11 bankruptcy, but debts are not typically discharged until after the repayment period is complete.
A struggling business may be able to meet these requirements, but that does not mean Chapter 11 is the best option. When considering Chapter 11 bankruptcy, it will help to consult with an experienced bankruptcy lawyer in Georgia. H. Lehman Franklin, P.C., can provide guidance based on your business finances and assets. We do not recommend rushing into decisions when it comes to debt and bankruptcy as a solution.
Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy you can file as an individual, a couple, or a business – much like a Chapter 11 bankruptcy. If qualifying conditions are met, a Chapter 7 bankruptcy is the often the preferred option if you or the business is not in a financial position to continue profitable operations. Most unsecured debts are discharged in a Chapter 7 bankruptcy. In the case of both individuals and businesses, nonexempt assets, if any, are sold by a trustee in order to pay creditors.
Consult a Bankruptcy Lawyer
The reality is that there are so many complexities involved in filing for bankruptcy that it is impossible to say which option is best for you without assessing your financial situation. H. Lehman Franklin, P.C., provides excellence in guidance on bankruptcy through what will likely be one of the most stressful situations that you as an individual or business will ever face.
Seeking advice before taking the plunge is highly recommended as you will have a much clearer picture of which option will provide the most benefits. Seek a consultation with H. Lehman Franklin, P.C., today if you or your business is facing financial hardship and you are considering bankruptcy options. You can reach our offices at 912-764-9616 or email us at firstname.lastname@example.org. Make the call today to begin the process of attaining financial freedom.