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Business bankruptcy, what are your options?The topic of this article is business bankruptcy.If your business is filing for bankruptcy, what exactly are your options?How do you go about filing for bankruptcy?What should you do?Is bankruptcy really the only way out? There are a number of advantages to bankruptcy.If you file for Chapter 7 business bankruptcy, once your debts are discharged through the bankruptcy court, they disappear.If you file for Chapter 13 bankruptcy, you will still have to pay some money.Bankruptcy is terrible for your credit, but you can immediately start to rebuild it.Chapter 7 bankruptcy can be finished in 4 to 8 months, while Chapter 13 bankruptcy might take a few months to get a plan approved, and then three to five years to complete that plan.Briefly, if you have few assets, large consumer debt, no real property, and a low income, you will best be served by filing for a Chapter 7 bankruptcy.If you don't qualify under these terms, you will be forced to file a Chapter 13 bankruptcy.
Before we discuss some of these options in depth, remember that you can make the process simpler and shorter before you actually even file for Bankruptcy.You can follow the example of TWA and Resorts International, and come up with a reorganization plan beforehand.Negotiate this plan and let your creditors and stockholders vote on it before you file.This will save you money because the process will be shorter, and it will let your creditors get more because you will be spending less in your legal fees.It also make people feel better about your business, and ends up in less disruption.This kind of preorganized and prepacked bankruptcy plan usually works best for Chapter 11 bankruptcy. The way that Chapter 11 bankruptcy works is that the U.S. Trustee will form one or more committees in order to represent the interests of stockholders and creditors.A plan will be formed to get out of debt, and this plan must be acceptable to everyone involved: the company, the creditors, the stockholders, and the bondholders.The court must also confirm the plan.The court can confirm the plan even if it is rejected by some creditors or stockholders.
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