Unfortunately for some companies, the business debts exceed the business assets. In those cases, it may be impossible to avoid business bankruptcy. There is hope though, as many are able to still do business after bankruptcy in certain instances. A bankruptcy for business differs in a number of ways than a normal Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. A Chapter 11 Bankruptcy has its own Chapter 11 Bankruptcy Laws. A Chapter 11 Bankruptcy has its own exemptions and plan. In other words, a Chapter 11 Bankruptcy is very different than Chapter 7 or Chapter 13 Bankruptcy. As business owners, we realize that we often have to make hard decisions. When you are an llc, corporation, or small business owner you don’t want to file a business bankruptcy alone. You want someone who knows how to file a Chapter 11 bankruptcy. That’s why our Chapter 11 bankruptcy attorneys are standing by and waiting to help relieve your business debts.
Corporate Bankruptcy and LLC Bankruptcy
Normally, a Chapter 11 Bankruptcy entails a filing of a corporate bankruptcy, an llc bankruptcy, or a small business bankruptcy. Generally, a corporate bankruptcy differs from a personal bankruptcy in that the income by the business filing bankruptcy exceeds a certain threshold. Although there are alternatives to business bankruptcy, many times there is no choice but to file.
What are the advantages of a Chapter 11 Bankruptcy or otherwise known as a Business Bankruptcy
Advantages of a Chapter 11 Business Bankruptcy:
1. In a Chapter 11 Bankruptcy there is no secured or unsecured claim limit for eligibility under § 109(e).
2. In a Chapter 11 business bankruptcy the debtor does not have to have a regular income to be eligible to file.
3. The Chapter 11 filing creates a new estate that can be taxed as a separate entity under 26 U.S.C. § 1398.
4. According to Chapter 11 Bankruptcy law, the value of purchase money secured claims is based on the value of the collateral and not the amount of the debt as required by the hanging paragraph following § 1325(a).
5. In a Chapter 11 Bankruptcy the “Projected disposable income” determines the amount of funds that must be
“distributed under the plan”, thus in a Chapter 11 Bankruptcy filing, the plan is not limited to 36-60 months.
6. “Projected disposable income” applies to the “value of the property to be distributed under the plan” in a Chapter 11 case.
7. Chapter 11 debtors do not have to use the IRS standard deductions in determining “project disposable income,” eventhough the debtor does not pass the means test under §707(b)(2).