If you are a business owner in Maryland that is considering filing for bankruptcy, it pays to know as much as possible about the differences between Chapter 13 Bankruptcy and Chapter 11 bankruptcy. In some ways, Chapter 13 and Chapter 11 Bankruptcy are fairly similar. Each allows you to continue running your business and propose a plan to restructure your debt. Depending on the legal requirements you are facing you may be able to:
- Gain extra time to sell assets you no longer need or can afford to keep
- Keep the property you need in order to operate your small business
- Change or restructure the payment terms on your secure debt
- Discharge some debts that you cannot afford to pay
Often times though small business owners are not eligible for Chapter 13 Bankruptcy. They are instead stuck filing for Chapter 11 Bankruptcy. In Maryland here is when you can file for Chapter 13 Bankruptcy as a business owner in Maryland.
Eligibility Requirements for Chapter 13 Bankruptcy for Business
If your business is a sole proprietorship, you may be eligible to file for Chapter 13 Bankruptcy on your own behalf, not on behalf of your business. This type of debt relief is only available to people with a regular income who owe less than $394,725 in unsecured debt and $1,184,200 in secured debt. An unsecured debt is a debt that cannot be backed by collateral, such as credit card bills and other expenses. Secured Debt is a type of debt that involves property the creditor can take if you fail to pay such as car loans and mortgages.
Why You Would FIle for Chapter 13 Bankruptcy As A Business Owner
The most important thing to know as a business owner is that you should be working with an experienced Maryland Bankruptcy Lawyer who can guide you through the entire process. They can help you file for Chapter 13 Bankruptcy, prepare you for your confirmation hearing, and explain which property you can keep under your plan.
In many cases, small business owners who operate as sole proprietors can elect to file for Chapter 13 Bankruptcy because it allows them to prevent foreclosure, make up mortgage payments, and pack back taxes while preventing interest from accumulating on tax debt.
About the Law Offices of Nicholas J Del Pizzo
The Law Offices of Nicholas J Del Pizzo is a team made up of experienced and dedicated attorneys who understand that people have legal needs that simply do not coincide with regular business hours. To learn more about how our law firm can help you by representing you in your bankruptcy case please call (410) 288-5788 or visit our contact us page.