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Filing for bankruptcy is not just for individuals. Businesses are also eligible to file for bankruptcy when they are unable to pay the debts they owe. A business can accrue debts the same way as individuals. Businesses have the same rights as individuals, and that is what allows them to file for bankruptcy. With today's economy, a lot of businesses are failing, closing and unable to pay their debts. This is leading to a lot of layoffs and to businesses having to file for bankruptcy.
The two most common forms of bankruptcy a business will file are chapter thirteen and chapter eleven. Chapter thirteen bankruptcy allows a business to be put on a form of payment plan that helps them pay the debts they owe over the course of several years. Chapter eleven bankruptcy is a form of reorganization. It is also known as corporate bankruptcy because it is designed for businesses in order for them to continue to stay open. The way chapter eleven works is that the business is allowed to keep its ownership and control of their assets while being labeled a debtor in possession. The normal operations of the business are continued to be performed while they work with the creditor in bankruptcy court to set up a plan of payment.
After certain requirements are set, the creditor has the ability to vote on the plan that has been set. If the creditor agrees on the plan, the business continues to run while the debts are being paid off under the regulations of the agreed upon plan, but if the creditor disapproves of the plan, there may be addition requirements set in order for the creditor to agree on the plan. The best way to bring forth an agreement is through the help of a bankruptcy attorney. They work for the business and with the creditor to set forth a plan that is fair for both parties. Without an attorney, things can become extremely difficult, and the business may have to close.
For more info search Bankruptcy Attorney San Diego or www.goldenstatelawgroup.com
