Business bankruptcy in Wagoner County is a great option. Bankruptcy is a helpful tool for individuals and businesses alike. People generally know, so long as you qualify, you can file bankruptcy under Chapter 7 or Chapter 13 of the bankruptcy code. However, when you consider filing bankruptcy on behalf of your business the answer is not so clear. There are several types of business entities such as sole proprietorships, limited liability companies and corporations. The general rule is that businesses can file under Chapter 7 of the bankruptcy code but not Chapter 13.
There’s an Exception to the Rule.
Sole proprietorships are the exception to the general rule. If you operate a business as a sole proprietor then you are still eligible to file under Chapter 7 or Chapter 13 of the bankruptcy code. In a sole proprietor Chapter 7 bankruptcy, if your business debt is higher than your personal debt then you don’t have to satisfy the income qualifications of Chapter 7 of the bankruptcy code. The trustee will administer your bankruptcy the same as if you were to file as an individual.
okeb.uscourts.gov/court-info/court-locations(opens in a new tab)
Limited Liability Companies and Corporations.
As mentioned above, the general rule is that limited liability companies and corporations can file under Chapter 7 of the bankruptcy code but not Chapter 13. These businesses are considered individual entities in the eyes of the law. There is no qualification to file a chapter 7 bankruptcy on behalf of a LLC or Corporation. One notable difference is unless you are a sole proprietor your business will not receive a discharge as in an individual bankruptcy. A discharge is an order of the bankruptcy court declaring that you, as an individual, are no longer responsible for the debts in your bankruptcy. In a business bankruptcy the entity will cease to exist therefore there is no need for a discharge.
Meeting of the Creditors
A 341 meeting of the creditors is typically scheduled one month after the business files for bankruptcy. For them to consider your case valid, the meeting must include both the individual filing for bankruptcy and the court-appointed bankruptcy trustee. The 341 meeting is an important stage in a Chapter 7 bankruptcy. The meeting is intended to establish the facts of the bankruptcy in question. It is in the 341 meeting that the trustee learns about the business operations, property and debt.
Business Operations, Property and Debt.
Upon filing a business bankruptcy the business is shut down and the businesses’ operations, property and debt become the responsibility of and property of the trustee. A business entity can’t use exemptions to protect assets in bankruptcy. Therefore, the trustee sells all of the business assets to pay creditors.
Personal Liability for Business Debt.
Before filing bankruptcy you should consider whether you personally guaranteed the debts of your business. If so, then your creditors will simply let the business file bankruptcy often without objection and then sue you individually for the guaranteed debts. Business owners generally follow a business bankruptcy with a personal bankruptcy. Then in their personal bankruptcy the debtor receives a discharge.
Contact Our Wagoner Bankruptcy Attorney.
If you’re facing financial strain and you live in Oklahoma bankruptcy might be for you. Each year, thousands of people and businesses file bankruptcy in our State. Many of them are just like you. Filing bankruptcy doesn’t have to be so difficult. Business bankruptcy in Wagoner County may help take the stress out of it. Get a free consultation today
