It isn’t just individuals who sometimes find a need for going bankrupt. Many small businesses after struggling financially for a period of time find that they have no other choice but to rely on this form of debt relief.
If you feel that your business has no other option but to file for bankruptcy then the first step should be to seek out a quality bankruptcy attorney in Houston. Once you do this you most likely will find that you have some options to choose from regarding the different types of bankruptcy.
No matter which one you want to file for such as the Chapter 7, Chapter 11 or Chapter 13 the business is going to have to meet the bankruptcy criteria for each of these. The Chapter 7 bankruptcy is the most common one for small businesses. In this particular bankruptcy most often all of the assets are sold to pay out the creditors, and then those debts that cannot be paid out will be discharged.
In the chapter 11 bankruptcy it leaves some hope for the future of the business. It works off of a reorganization of the finances. This form of bankruptcy may be applicable to the corporation, partnerships and even sole proprietors.
Normally the Chapter 13 bankruptcy relief is used for individuals but it can also sometimes be utilized by sole proprietors.
There is one more form of bankruptcy which is the Chapter 12 version but this is applicable to family farmers or family fishermen.