Bankruptcy Chapters

Did you know there are SIX chapters of bankruptcies?

Did you know there are SIX types of bankruptcies? Bankruptcy is one of the oldest laws. Geraci Law is a consumer bankruptcy law firm focusing on individuals needing help with personal debt.

Most common bankruptcy types (also mainly for consumers) are Chapter 7 and Chapter 13. Some resources to read about Chapter 7 and Chapter 13:

But what about the other 4 types of bankruptcies?

Chapter 9

This bankruptcy chapter is for cities, towns, counties, school districts – basically any municipality. The largest Chapter 9 bankruptcy filing was the City of Detroit in 2013. Filing a Chapter 9 bankruptcy protects municipalities from collectors and creditors while the city/school district/town/county creates a plan for their debt.

Chapter 11

You CAN file a Chapter 11 bankruptcy as an individual but so can a business. Similar to a Chapter 13, Chapter 11 is a reorganization of debt. In Chapter 11, an individual can keep operating the business and assets are not sold or auctioned to pay debt (unlike a Chapter 7).

Chapter 12

This is a very specific Chapter to family fisherman and family farmers struggling to pay debt. Like a Chapter 13, a repayment plan is spread out over the course of three to five years.

Chapter 15

This Chapter was added to the United States Bankruptcy Code back in 2005. Basically a debtor who has assets outside of the United States would file a Chapter 15 to cooperate with foreign courts.

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews 5starsince November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com

Chapter 36 – Business Bankruptcies

An excerpt from Attorney Peter Francis Geraci’s “The Complete Book on Bankruptcy.” Learn more about misconceptions about bankruptcy!

Chapter 36 – Business Bankruptcies

Stein Mart is the most recent business to file for bankruptcy since the start of the pandemic. You may wonder what is a business bankruptcy and what does it mean? You may be a business owner thinking about filing for bankruptcy. Below is an excerpt from Attorney Peter Francis Geraci’s Complete Book on Bankruptcy.

At Geraci Law, we don’t do bankruptcies for operating business. You may as well wind it up properly yourself. Pay your taxes, sell your inventory, and close up. Businesses don’t get a discharge anyway. Chapter 7 only liquidates a business. You can do that by yourself.

You may have heard of major corporations reorganizing under Chapter 11 of the Bankruptcy Code. Small businesses seldom reorganize, and 95% of the businesses with under $2 million in sales that go into Chapter 11 do not reorganize successfully and go under completely. In October, 2005, a simplified reorganization procedure for small businesses was enacted.

Businesses don’t usually file bankruptcy because only people get discharges. Business usually wind up their affairs, pay off what creditors they can, and disappear. Only if a real person has personal liability, or the business really wants to liquidate using bankruptcy, do small businesses file.

Many small businesses are incorporated. If the owner of the incorporated business did not sign personally, it is only the corporation that is obligated. In that case, certainly the owner does not need a bankruptcy attorney. But does the small corporation need bankruptcy relief? The answer generally is, no. Just struggle along. If your small incorporated business is still alive, do the best you can. Stay away from bankruptcy. Make sure you pay the employee withholding taxes, unemployment taxes, and sales tax. Those are items that an officer or shareholder of a corporation may be held personally liable for. Try to pull out of your problem by yourself, and if you cannot, fold the business yourself.

However, if your business is not incorporated, you may be personally liable for its debts. In that case, the same rules apply. I see no benefit to putting a going business into bankruptcy court. If you are going under, just go out of business. Many creditors tend to just drift away. After you are out of business, and find a regular job, if anyone sues you, you may want to file a Chapter 7. Bankruptcy rules will generally not help a failing small business to succeed.

If you have already closed your business, and remain liable on its bills, and have other bills such as charge card debt, we may be able to get you a fresh start. We represent a lot of people who have already closed their businesses, there are no assets left, and they need to get a fresh start.

If that is your business is closed up, and you are now doing something else, and you just want to eliminate personal liability on loans, or if you have a 1 person business, you may benefit greatly from the bankruptcy relief which is available. But, if your business is still going, don’t call me!

Problem: Jose had a hot dog stand, and his rent doubled, and he was evicted. He is now working as a cook making about $32,000.00 a year, but that is not enough to pay for all the bills he ran up trying to save his small business, and now the creditors are suing him.

The Peter Francis Geraci Chapter 7 or 13 Solution: Jose can file a Chapter 7, list both his business and personal debts, and get a fresh start.

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com.  Bankruptcy laws are in place to help you.  Who knows bankruptcy like Geraci Law?  Geraci Law has 30,000 5-star reviews 5starsince November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.