Small Business Bankruptcy: Choose From Chapter Seven And Chapter Eleven Bankruptcies

Spend Time In Jail

At one time not so long ago an entrepreneur that could not pay off their small business’s debts would have to spend time in jail. Today, however, a small business that goes under does enjoy a chance to get some form of relief that is available in the form of current small business bankruptcy laws which at least ensures that the owner of a small business that has failed will not have to spend time in jail.

There are two types of small business bankruptcy chapters that an entrepreneur will need to choose from when filing for small business bankruptcy. The first is of course Chapter Seven bankruptcy while the other is Chapter Eleven bankruptcy. The former is very commonly used as it allows a small business to liquidate all of its assets and to use the proceeds of such liquidation to pay off their debts. A trustee appointed by the court will collect those small business’s assets that are not exempted by the court and these assets are then sold off and the proceeds are distributed among the various creditors.

Chapter Eleven small business bankruptcies is really a form of liquidation and even a means to reorganize and rehabilitate a small business. Such a kind of small business bankruptcy does in fact allow the company to reorganize it and also its debts in a way that will allow the small business to meet its debt obligations through realization of earnings that the business hopes to realize in the times to come. This form of small business bankruptcy too is overseen by a trustee appointed by the court.

A business bankruptcy attorney can specialize as a counsel to the debtor or as counsel of the creditor. For anyone that is suffering from credit problems or who needs to file for bankruptcy it is definitely worth their while to avail of the expertise of a good debtor counsel. Only an experienced attorney that has experience will be able to represent you in the proper manner.