If you're facing financial trouble and have begun considering bankruptcy as an option, you might have heard the term "Chapter 7 bankruptcy" thrown around in conversations but don't know what it means or how it works. If so, you're not alone; bankruptcy laws are complicated, but this guide will help explain the basics of bankruptcy for small business owners and how you can benefit from seeking help from a qualified bankruptcy attorney.
1. Exemption of Vital Survival Assets
The first reason you should hire a Chapter 7 bankruptcy attorney for your small business is that they can help exempt vital survival assets like your home and car. This means that filing for bankruptcy doesn't bring your life to a complete halt or make you delinquent; you can still maintain a life relatively close to the standards you are used to.
2. Write Off Both Personal and Business Debt as a Sole Proprietor
As a sole proprietor, you can file for Chapter 7 bankruptcy and wipe out your personal and business debt. This is because the legal structure of a sole proprietor business recognizes the owner and business as the same legal entity.
This is a huge benefit, as it can help you get a fresh start financially. Plus, it can give you some much-needed peace of mind during what is likely a very stressful time.
3. Stop Harassment by Creditors for Both Business and Personal Obligations
Are you under pressure from creditor demands, threats, and harassment? Your creditors may be contacting you repeatedly by phone or mail with threats of wage garnishment, lawsuits, or even repossession.
These tactics can make it difficult to focus on running your business and managing your personal life. A chapter 7 bankruptcy attorney will help get relief from the court with a stay order on most of your debt.
4. Buy Time for Completing Home Payments
One of the greatest fears among people who are facing bankruptcy is that they will lose their homes. A Chapter 7 bankruptcy attorney can help with this by giving you the time you need to make your mortgage payments to keep your home. While Chapter 7 bankruptcy doesn't write off your mortgage, it enables negotiation for easier terms and prevents a foreclosure.
5. Protect Avenues of Income
One of the biggest benefits of hiring a Chapter 7 bankruptcy attorney is that they can help protect your avenues of income. This includes inheritance, property from a divorce decree or personal injury, settlement agreement, and insurance death benefits. As a result, your creditors cannot touch these incomes, giving your family much-needed relief.
Bankruptcy offers a legal shield against adverse actions from your debt obligations. But you need good legal help to determine the kind of filing and how to do it.
Contact a local bankruptcy attorney to learn more.