Chapter 7 is a personal bankruptcy option that can eliminate some forms of debt and stop collection calls. A small business owner in New Hampshire may be able to file Chapter 7 personal bankruptcy and still keep their business.
Chapter 7 is the most common bankruptcy type for individuals and married couples. Chapter 7 dismisses unsecured debt including credit card and medical debt. When someone files for Chapter 7 bankruptcy, collection efforts should be halted. This includes phone calls, letters and all other contact by debt collectors. A trustee is appointed to each bankruptcy case, and he or she determines which of the debtor’s assets will be sold to pay off their creditors. People who file Chapter 7 often are able to keep their home, their car and their business if they own a sole proprietorship.
Someone who is in a partnership or owns a corporation or a limited liability company cannot file Chapter 7 personal bankruptcy. Instead, the business must file bankruptcy. Under Chapter 7, assets that belong to the business will be sold rather than the owner’s personal assets. After this, the business will cease to exist.
A business can also choose to file for Chapter 11 bankruptcy. This allows for a debt repayment plan than can save the business and keep it operational. For personal bankruptcy, Chapter 13 is a similar option.
A business owner who is struggling with debt could contact an attorney to advise them on bankruptcy options. An attorney could help someone to understand the different types of bankruptcy and the possible outcomes for each type. An attorney could also assist in filing paperwork completely and correctly to avoid delays and stop collection calls as quickly as possible.
