When a business is going into loss and the debts pile up and there is no solution to get out of the problem, the business files for bankruptcy. No doubt bankruptcy proceedings are stressful. Miami business lawyer understands you get tempted to file bankruptcy on your own in a situation when money is tight, but having an attorney can help you go through this stressful time smoothly. Sole proprietors can file bankruptcy on their own, but others need an attorney to represent themselves.

It is important to learn if you are filling the right kind of bankruptcy, for this you need Miami business lawyer to guide you through the process.  Our government has bankruptcy laws which help not only the creditors but also debtors.

Chapter 7, Chapter 11, or Chapter 13 bankruptcy

People file for chapter 7 bankruptcy when there are unpaid bills, overextended credit and there is no chance that business can stand again. Chapter 7 is referred to as “Straight bankruptcy”. In this type of bankruptcy, all your assets are liquidated to pay off creditors.  Within four months you get notice of discharge, the record of bankruptcy stays on the credit record for 10 years.

In chapter 11 bankruptcy, personal assets are not at stake, the debtor gets to keep his property and other personal assets. This type of bankruptcy is mainly filed to reorganize the business; you get time to restructure the debts. Chapter 11 is the most complex type of bankruptcy and also the most expensive one. In most cases of chapter 11 bankruptcy, the firms are operational, but a business can’t take important decisions without the interruption of court. Usually, businesses and LLCs file this type of bankruptcy, in rare cases individuals who are not eligible to file under chapter 7 and 13 are considered to file under chapter 11.

In Chapter 13 Bankruptcy if a debtor wants to retain the property and all the assets, then filing with the help of business litigation attorney Miami under Chapter 13 is a better choice. Chapter 13 bankruptcy is also known as a reorganization bankruptcy. This type of bankruptcy enables you to pay off debts over a period of three to five years. Chapter 13 offers a grace period for individuals who have a consistent income. When the bankruptcy is approved by the court, creditors don’t get to contact the debtor. The debtor may work and keep paying their debts over a period of time.