Feb 10,2019 | 15 min read

Filing for Bankruptcy? Keep These Things in Mind

Filing for Bankruptcy? Keep These Things in Mind

Bankruptcy is a legal status of a person or organization who are not capable of repaying their debts. However, it is not the only status that an insolvent person may have. In most cases, bankruptcy is imposed by jurisdiction and is often initiated by the debtor(s).

Hire top corporate lawyers for best business and financial advices.

Types of Bankruptcy

While there are different types of bankruptcies, most common and notable ones are chapter 7 and chapter 11.

  • Chapter 7 is generally referred to as liquidation, and is the most common form of bankruptcy.
  • Chapter 11 refers to re-organization of businesses and allows the bankrupt a chance for more negotiation with debtors, once the filing is initiated.

It is important that you understand the types of bankruptcies before hiring a corporate lawyer.

Other alternatives

While you might be thinking that filing for bankruptcy is the only option you have; it often isn’t. It is vital that you try to evaluate all the options first–

  • Negotiation with debtors before filing the claim.
  • Change in payment plans, in order to buy more time.
  • Many of the creditors might give you leeway. It is because, if your business fails, it is even harder for them to recover their money. Buy yourself more time and save all the chaos of jurisdiction.

It is important to hire a renowned corporate lawyer for yourself to assist you in giving advices and strategies.

Eligibility –

In case you’ve already prepared yourself for filing bankruptcy, the process isn’t over yet. You need to pass an eligibility test to see if you fit the bill for chapter 7. The test will include analysis and review of your annual income. If your average income is low enough, compared to the state median, you are then eligible to file for bankruptcy.
If your income is high than the given state median, then you’ve got enough disposable income to repay the creditors.

Hire a good corporate lawyer to help you through this process.

Organize your paperworks and documents that are imperative to file bankruptcy. Files, outgoings, debts, assets and anything relevant.

Guidance -

Even though you have your corporate lawyer by your side to offer you timely advices, it is suggested that you get in touch with a consultancy firm, or get free legal advice online.

These are experts who will provide you with counselling and right strategies before you decide to declare bankruptcy.

Bankruptcy is a challenging time to test your morality and patience. It is best if you choose your options wisely and have the right legal guidance by your side. Get in touch with us and get free legal advicefrom professionals who have years of expertise in this sector.

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