It is difficult to launch a new business, and you put your heart and soul into it.
However, problems such as heavy debt can arise and threaten the success of your company. Can Chapter 13 for sole proprietors help your business stay afloat?
About Chapter 13 for business
If you need a new plan for paying off your debt and relief from creditor harassment, filing Chapter 13 may be one of your best business moves. As long as you are a sole proprietor with an unincorporated business, you qualify for this type of bankruptcy protection. Partnerships and corporations are not eligible. Once you file, an automatic stay-on-collection activity will begin. Your attorney can work on your behalf to stop creditors from harassing you.
Chapter 13 versus Chapter 11
Business owners can also file Chapter 11. However, many gravitate toward Chapter 13 because the filing fee is less expensive, and the bankruptcy process is not as complex. Additionally, the range of debts you can discharge with Chapter 13 is larger.
Chapter 13 benefits
Chapter 13 allows you to establish an affordable payment plan based either on your business income prior to your filing or on your income based on a six-month average. You can keep assets such as your office equipment and furniture. However, if you must sell any of your assets in order to help the business survive, the Chapter 13 plan provides you with time to do so.
Various reasons may exist for the burden of debt that is keeping your business from moving forward. If the problem is causing you sleepless nights, it is time to look for a solution. Chapter 13 bankruptcy for small businesses may be the answer you seek.