How To File For Bankruptcy
There comes a point in time when a business owner makes the important decision to close down his business. When the expenses are already more than the income and the entrepreneur believes that the situation can no longer be salvaged, the best bet is to file for bankruptcy. While it is an extreme measure, it can also save you some money. In this article, we shall be looking at the different steps in filing for bankruptcy.
When an entrepreneur declares to bankruptcy, their situation is investigated by a trustee. They will be responsible for seeing the bankruptcy through. The business owner deals with the trustee and need not appear in court. The only thing the business owner has to do is confirm how to pay their debts. It is worth noting that bankruptcy is more of an administrative process than a legal proceeding. The trustee then determines the type of bankruptcy that they will file depending on the debtors ability to pay and if they have assets that they would like to keep. On your part as a business owner, you need to make sure that all your financial information are in order so your trustee can facilitate the bankruptcy process.
Before filing for bankruptcy, you have to undergo credit counseling from an approved agency. This is a required step or else your petition for bankruptcy will not be accepted. In the credit counseling, the agency will help you determine the kind of bankruptcy that is right for you. If you opt for Chapter 13, they will help you devise a payment plan. It is important for you to understand the scheme because you should make the payments not later than 30 days after submission of your petition, even if it is not yet accepted. When the petition for bankruptcy has been filed and accepted, your creditors will be informed that they been included in your petition. Likewise, they will be notified of the automatic stay on your accounts. After three to six weeks, your trustee will then meet up with the creditors. The lenders have the option not to attend but you are required to. During the meeting, your trustee will make you understand the consequences of declaring bankruptcy.