When filing for bankruptcy, many business owners in Wisconsin choose to file for Chapter 7. However, Chapter 13 can be a great option for business owners who meet the qualifications. While businesses aren’t eligible for Chapter 13 bankruptcy, their owner can file for Chapter 13 individually.
What makes Chapter 13 different from Chapter 7?
When a business owner files for Chapter 7 bankruptcy, they lose their entire business. Their business assets are sold off to help pay their debts. However, when they file for Chapter 13, they might be able to keep their business. Instead, they can restructure their debt to make it easier to pay off. They might also be able to reduce some of their debts.
One issue with filing for Chapter 13 is that business owners have to meet certain qualifications. They have to prove to the court that their income is so low that they can’t meet their financial obligations. Many experts recommend hiring an attorney to help them through the process. If they qualify for Chapter 13, the individual can start paying off their debts without having to sell off their business, house, car or other properties.
What’s the best way for a business owner to file for bankruptcy?
Before they file for Chapter 13 bankruptcy, a business owner should always hire an attorney. An attorney might be able to help them figure out if they qualify for bankruptcy. If they do, the attorney might be able to help them prove to the court that they can’t pay off their debts and need a debt reduction.
Additionally, an attorney might be able to offer advice throughout the proceedings that makes the process as quick and painless as possible. They may help their client file for bankruptcy while protecting most of their assets.