Business Bankruptcy
Business Bankruptcy in Michigan
The most common business bankruptcy is a Chapter 11. This allows a business to reorganize and restructure its debt obligations similar to a Chapter 13 personal bankruptcy. A business owner who files for bankruptcy is able to prioritize and reduce their business-related debts, allowing time to restructure operations. A business working out its debts also benefits their creditors by letting them collect at least a portion of the debts owed them in a timely fashion.
Chapter 11 pertains to the following categories:
- Any corporate entity (such as a Limited Liability Corporation or LLC)
- Individuals with total secured debt obligations in excess of $1,000,000
Other Types of Business Bankruptcies
Other businesses or business owners can qualify to resolve their debt situation through on of the following programs:
- Chapter 7: This is a liquidation of a business to pay off debts to its creditors of the business.
- Chapter 13: This applies to non-incorporated businesses (“Doing Business As” or DBA) where the owner of the business can file Chapter 13 reorganization for debts that he/she is personally obligated on and also include the name of the DBA and related debts.
Chapter 7
In Chapter 7 bankruptcy, any property that is not exempt from the bankruptcy may be sold by a trustee, who in turns applies those proceeds towards your creditors. You can keep some interest in certain assets, and in most cases, no personal property needs to be lost. You can also usually choose the asset exemptions that are most beneficial to you, according to the applicable bankruptcy and state law. In this case, creditors retain ownership of any collateral you have pledged against existing loans.
Chapter 11
Chapter 11 is the most common type of business bankruptcy, as it allows a business to operate while repaying creditors through a plan approved by the court.
Chapter 13
Chapter 13 bankruptcy offers a way to repay debts over a period of time, through a plan approved by the court. While a Chapter 13 is a personal bankruptcy, a business owner may file a Chapter 13 to personally reorganize debt and include the related debts from their non-incorporated business (DBA).
While Acclaim Legal Services only handles Chapter 7 and Chapter 13 business bankruptcies, we are able to provide referrals to a qualified bankruptcy law firm who handle Chapter 11 cases.
We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in Southfield, Dearborn, Flint and Warren, Michigan. Please call us toll free at 888-868-6005 or click here to schedule a consultation right now.
