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When should I choose Chapter 7?
Home » Accounting » Business Bankruptcy » When should I choose Chapter 7?Despite glaring differences between the two types of bankruptcy filings, the most important aspect of the differences within a Chapter 7 or Chapter 13 filing can be found in how each one can best benefit a business’s situation, financially and professionally.
When a company or business becomes so overwhelmed with debt that they are unable to continue running the business, they often file Chapter 7 because requires less time and bestows upon the debtor a clean slate in which there is no limit to how much debt or how little debt can be discharged.
Also, any and all wages that the debtor earns post-bankruptcy remain entirely his or hers, in which no creditor or court can seize.
But, all of these advantages within Chapter 7 are not without their disadvantaged counterparts. For instance, as stated earlier, there are certain debts that can be collected after a Chapter 7 filing. Also mentioned earlier, any co-signers are saddled with the debt unless other actions (like filing for bankruptcy) are taken. Chapter 7 filings are notoriously difficult to cancel when started. You most always lose property.
Lastly, bankruptcy severely, utterly devastates any and all credit a business owner has built up. In fact, bankruptcy is commonly seen as a credit rating destroyer.
Related Business Bankruptcy Articles
- What is Business Bankruptcy?
- Do all of a business's debts get erased by declaring Bankruptcy?
- When should I choose Chapter 7?
- When should I choose Chapter 13?
- Can I switch to a Chapter 7 Bankruptcy even though I've filed for Chapter 13?
- What are the circumstances in which a business should decide to file for Bankruptcy?