If you own a small business and need help reorganizing your debts,
Chapter 13 bankruptcy may be an option to consider. This chapter can help you develop a repayment
structure based on income earnings, type of debts and expenses you have.
There are a few factors to consider in helping you understand how the
process works and meeting qualifications.
Small businesses considered a sole proprietorship are more likely to qualify
for Chapter 13, although certain partnership entities may qualify. An
LLC or Corporation may qualify under limited circumstances. When it comes
down to it, if you are personally liable for business-related debt it
may help you qualify for Chapter 13.
Chapter 13 is a repayment plan approved by the court based on your ability
to make monthly payments. Any business debts that are considered an unsecured
non-priority may be eliminated or discharged. In many cases business debts
are not distinguished from personal debts, but if your debt is in relation
to being a cosigner (such as a credit card or loan) for the business in
question, the creditor may look to business assets to satisfy what is owed.
Chapter 13 has benefits for small business owners. You can cram down or
reduce secure loan payments on property such as a vehicle or business
equipment. You can make payments based on what you can pay under the plan
which may last anywhere from 3 to 5 years. You can make payments on priority
debts while maintaining business operations. Discuss your situation with
a Dallas / Fort Worth bankruptcy attorney.