Legal Services | Attorneys | Personal Bankruptcy | Business Bankruptcy | Contact Us | Locations | Free Consultation

Texas Bankruptcy - Bankruptcy For Business

Business Bankruptcy

Federal bankruptcy law helps businesses deal with their debt by allowing them to either request a complete liquidation under Chapter 7 of the Bankruptcy Code or a repayment plan under Chapter 11. To take advantage of a complete liquidation under Chapter 7, the business must close its doors. The business that opts for the repayment plan under Chapter 11 may remain open. An individual who operates a business as an unincorporated sole proprietor (other than stock and commodity brokers) can also use Chapter 13 of the Bankruptcy Code to repay debts but only by filing as an individual and including the business-related debts for which he is personally liable.

Chapter 7

Bankruptcy under Chapter 7 of the Bankruptcy Code is often referred to as “liquidation bankruptcy” or a "straight bankruptcy.” Under Chapter 7, businesses must cease all operations and allow the Bankruptcy Court to liquidate all assets to pay the debts. All types of business entities may use Chapter 7.

A business debtor begins the bankruptcy process by filing a petition with its local bankruptcy court. Once the petition is filed, an “automatic stay” goes into effect and the creditors are prohibited from making any attempt to collect their debt, including attempting foreclosure and repossession. Along with the petition, or shortly thereafter, the debtor files various written “schedules” and “statements” to inform the Court of its outstanding debts, its current income and expenses, any existing contracts, any current or potential lawsuits, and any recent asset transfers. Upon receipt of the Petition, the Court appoints a Bankruptcy Trustee to handle the debtor’s case. The Trustee collects and sells the assets of the business and uses the proceeds to pay off the creditors. Once the Trustee sells all of the assets and distributes the proceeds, the Bankruptcy Court discharges the remaining debt and concludes the bankruptcy proceeding.

Chapter 11

Under Chapter 11 of the Bankruptcy Code, businesses can reorganize their debts and pay them off over time. Unlike Chapter 7, Chapter 11 allows businesses to continue to operate while repaying their debts. Businesses may be given up to six (6) years to repay their debts. Although it offers businesses the option of remaining in operation, the Chapter 11 proceeding is time consuming and expensive.

A debtor begins a Chapter 11 bankruptcy in the same manner as a Chapter 7 bankruptcy – by filing a petition with his local bankruptcy court. As in the Chapter 7 case, once the petition is filed, an “automatic stay” goes into effect and the creditors are prohibited from making any attempt to collect their debt, including attempting foreclosure and repossession. Also like the Chapter 7 case, the business debtor in the Chapter 11 case files various written “schedules” and “statements” to inform the Court of its outstanding debts, its current income and expenses, any existing contracts, any current or potential lawsuits, and any recent asset transfers. Upon receipt of the Petition, the Court appoints a Bankruptcy Trustee to handle the debtor’s case. The business debtor then proposes a reorganization plan to the Bankruptcy Trustee for approval by the Court. The proposed reorganization plan includes a proposed debt repayment schedule and may include a request to terminate burdensome contracts and leases and recover assets. The business begins to operate under the reorganization plan once the Court approves the plan. Upon successful completion of the plan, the Court will discharge the balance of the business’ debts and conclude the bankruptcy.

Chapter 13

Chapter 13 is only available to sole proprietors. Sole proprietors cannot use Chapter 13 to file bankruptcy for the business. Sole proprietors must file as individuals to take advantage of Chapter 13 but can include business debts for which they are personally liable. The Chapter 13 bankruptcy proceeds in the same manner as the Chapter 11 bankruptcy except that execution of the approved repayment plan does not require as much activity by the debtor.

If your business is overwhelmed with debt, contact us today. We can help you decide if bankruptcy is for you. The only thing you have to lose is your debt. 1-800-436-9056

footer
Please read: Certification | Disclaimer | TexasLegalWeb | State Bar of Texas | Resource LinksLast Updated April 26, 2017
RJABANKRUPTCY © 2004 - 2017 RJ Atkinson, LLP Attorneys At Law – All Rights Reserved
Austin Bankruptcy | San Antonio Bankruptcy | Houston Bankruptcy | Dallas Bankruptcy
Stop Foreclosure Austin | Stop Foreclosure San Antonio | Stop Foreclosure Houston | Stop Foreclosure Dallas | Affordable Bankruptcy Fees | IRS Tax Problems
RJA Bankruptcy Attorneys offer Affordable Bankruptcy, Debt Relief and Debt Consolidation. Texas Bankruptcy Lawyers offer Low Cost Bankruptcy Attorney Fees in Austin, Dallas, Fort Worth, Plano, San Antonio, & Houston *Principal Office.

Bankruptcy Lawyer / Attorney RJ Atkinson provides Chapter 7, 11, 12, 13, Bankruptcy, Debt Relief & Discount Legal Services
Filing Bankruptcy can sometimes be the fastest way to get out of debt and may be the most affordable way to get a fresh financial start. Chapter 7 Bankruptcy can quickly wipe out your debts, increase your credit score, stop wage garnishments, get rid of credit card debt, eliminate medical bills, stop payday loans, stop bill collectors, erase negative credit reporting, and reestablish new credit after bankruptcy. RJ Atkinson – Bankruptcy Lawyers have payment plans to make filing Chapter 7 and Chapter 13 Bankruptcy affordable which include low cost flat fees for Chapter 7 that may be considered the cheapest bankruptcy attorney fees depending on the costs other bankruptcy lawyers charge. Chapter 13 Bankruptcy can save your home from foreclosure, save your car from repossession, lower monthly payments, reduce interest rates, get rid of late fees, reduce credit card interest, payoff high credit card debt, raise your credit score, stop creditor harassment, get rid of debt, reduce debt, eliminate creditor calls at work, stop collection calls, start over financially, discharge debts and/or be debt free in 3 to 5 years. IRS tax problems, tax levies, wage garnishments, back taxes, payroll taxes, income taxes can often be handled in Chapter 13 bankruptcy. Divorce/Bankruptcy – past due child support arrears, alimony, spousal support, and divorce debt can often be handled in chapter 13 bankruptcy. The Law Offices of RJ Atkinson handles debt consolidation, loan modifications, credit card debt settlement, debt negotiation, lawsuit defense, IRS problems, credit card lawsuits, TROs temporary restraining orders to stop foreclosure, forbearance agreements to stop foreclosure, FDCPA Fair Debt Collection Practices Act lawsuits, FCRA Fair Credit Reporting Act lawsuits, credit report disputes, debt collection lawsuits, adversary complaints in bankruptcy, bankruptcies, foreclosure workouts, mortgage short sales, real estate property tax disputes, civil litigation, commercial litigation, tax lawsuits, small business bankruptcy, corporate bankruptcy, business creditor representation, and most every kind of debt related issue or financially based legal problem on a case by case basis.
Pursuant to 11 U.S.C. §528, “We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”