Even for the most successful entrepreneurs in the world, there are projects that just never reach their potential and have to be shut down. But while top business folk can absorb losses easily, Chapter 7 bankruptcy may be an option to help less-capitalized business owners to let go of old dreams and start building new ones. Once old debts are settled, a new venture can begin. There are several areas in which owners of defunct small enterprises must be careful, however. The first thing that a recovering entrepreneur needs to do is figure out exactly what the business’s assets and liabilities total. There may be owned machinery and supplies that can be sold in order to lessen the amount of red ink in one’s ledger. Leases for items must be canceled so that money isn’t drained away. Whatever the decisions are on assets and liabilities, it’s of vital importance to get a number before filing for bankruptcy. Secondly, it must be discovered what debts are for the business and what debts can also be considered personal. If the business owner personally guaranteed any loans with a lender, that lender may have the right to claim assets of the business and… Continue reading
When many New York entrepreneurs imagine opening their very own business, they often neglect to imagine what might happen if the business should fail. One family wound up with over $170,000 of debt and lost their home after they used their home as collateral. However, this could have been completely avoided. Bankruptcy law in the United States does have certain bankruptcy exemptions that may protect an investor’s home should they have to file for bankruptcy. For example, the most well known homestead exempt states are Florida and Texas. Many multi-millionaires, including executives for Enron and even OJ Simpson, purchased homes in these states before filing for bankruptcy. There are a number of other assets that may be exempt as well. Up to 75 percent of wages or salaries may be exempt in addition to retirement, pensions, insurance and even student financial aid. Personal property, including jewelry and household items, up to certain dollar limits, may also be exempt. However, filing for bankruptcy can be confusing. There are three well-known types of bankruptcy. Chapter 7 liquidation deals with debt ranging from $2,500 to $10,000. Chapter 11 reorganization deals with debt of $25,000 and up. This reorganization leaves the decisions of the… Continue reading
Businesses can face financial difficulties for a variety of reasons. In some instances, filing for bankruptcy may be the business owner’s best or only option. Depending on the business’ financial situation and the desires of the business owner, there are a number of bankruptcy options. It’s recommended that an individual consult with an attorney as soon as it appears that bankruptcy may be an option because an attorney may be able to help determine which course of action makes the most sense in the particular situation. If a business owner wants to cease operations and completely liquidate their business, a Chapter 7 bankruptcy may be an option to consider. In a Chapter 7 bankruptcy, a trustee will be appointed to sell all of the company’s assets. The monies received as a result of the sale of assets will be used to pay the creditors of the bankrupt business. Chapter 7 bankruptcies are most commonly used for small businesses and sole proprietors. A Chapter 11 bankruptcy allows a financially struggling business the opportunity to continue operations under a plan of reorganization. In a Chapter 11 bankruptcy, the debtor and creditors will negotiate a reorganization plan that allows the business to continue operating… Continue reading
Bold labels are required.