Law Office of Paul Petrillo
Contact Us Today 603-635-4149
Menu Contact

Chapter 13 bankruptcy options for businesses

For businesses in Salem struggling with debt, the best course of action to resolve those debts while still maintaining ongoing operations may be to seek bankruptcy protection. Businesses in such a situation that are considering bankruptcy may think that there options are limited filing under a Chapter 11 case. However, a company may file a Chapter 13 bankruptcy provided that certain conditions are met.

The United States Courts state an individual operating an unincorporated business may seek Chapter 13 bankruptcy protection. Thus, sole proprietorships may qualify for this form of bankruptcy, as may general partnerships under certain conditions. It does, however, go on to state that such businesses may not have unsecured debt in excess of $383,175 or secured debts greater than $1,149,525 if they want to be considered as eligible for Chapter 13 bankruptcy. These restrictions typically limit the types of companies that can seek this form of debt relief to small businesses.

What are the advantages of a small business filing for Chapter 13 as opposed to another form of bankruptcy? Primarily, a Chapter 13 can help ensure its ability to stay in business by retaining its assets, even those that are nonexempt. For example, according to the federal exemption guidelines, in a Chapter 7 case a debtor can only exempt the following amounts of interest in assets one may consider to be business-related:

  •          $2,400 in a motor vehicle
  •          $8,000 in aggregate value of personal items such as appliances, animals or crops
  •          $1,500 in tools of the trade

Beyond that value, the bankruptcy trustee will often liquidate assets to settle debt claims. With a Chapter 13, however, a small business owner can include the value of nonexempt assets in the repayment plan. He or she simply needs to guarantee the repayment amounts equal the nonexempt amounts due to creditors. 

No Comments

Leave a comment
Comment Information

Start Your Case Today

Whether you have a family law issue, an estate planning question or are considering bankruptcy, I can help you find a sustainable solution that provides relief and hope. Schedule your consultation at my Nashua, New Hampshire office today by calling 603-635-4149 or by sending us an email.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

email us for a response
Law Office of Paul Petrillo