Unexpected Benefits of Filing for Bankruptcy in Maryland
Differences Between Personal Bankruptcy and Business Bankruptcy
Bankruptcy is a legal process designed to help individuals or businesses in financial distress get relief from debts they cannot repay. However, the type of bankruptcy you file for depends on whether you are an individual or a business. Understanding the differences between personal bankruptcy and business bankruptcy is crucial to choosing the best path forward. This article will explore what sets these two types of bankruptcies apart and provide guidance on how to seek legal assistance in Baltimore.
What is Personal Bankruptcy?
Personal bankruptcy is a legal process that allows individuals to eliminate or reorganize their debts when they are unable to meet their financial obligations. It typically comes in two main forms: Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is known as "liquidation bankruptcy," where the individual’s non-exempt assets are sold to pay off creditors. After liquidation, remaining eligible debts can be discharged, providing a fresh financial start.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a "reorganization bankruptcy" that allows individuals to keep their assets and create a repayment plan to pay off their debts over three to five years. This option is often used by individuals who do not qualify for Chapter 7 due to their income level.
If you're struggling with overwhelming debt, harassing creditors, or lawsuits, personal bankruptcy may provide the relief you need. Working with an experienced bankruptcy attorney can help you understand your options, file the necessary paperwork, and protect your assets where possible
What is Business Bankruptcy?
Business bankruptcy is intended for businesses that can no longer meet their financial obligations. There are several forms of business bankruptcy, with the most common being Chapter 7 and Chapter 11 bankruptcies.
Chapter 7 Business Bankruptcy
Chapter 7 Business Bankruptcy involves liquidating the company’s assets to pay off its debts. This is usually the option when a business has no viable path to profitability. After liquidation, the business typically ceases operations.
Chapter 11 Bankruptcy
Chapter 11 Bankruptcy allows businesses to reorganize their debts while continuing operations. It gives companies a chance to renegotiate debts, create a restructuring plan, and pay off creditors over time, allowing them to keep their doors open during and after the bankruptcy process.
Business bankruptcy is a complex process that requires legal guidance to navigate effectively. An experienced bankruptcy attorney can help business owners understand their options, negotiate with creditors, and develop a plan that either liquidates the business in an orderly manner or helps it survive through reorganization.
The Key Differences Between Personal Bankruptcy and Business Bankruptcy
- Eligibility: Personal bankruptcy is filed by individuals, while business bankruptcy is filed by companies or sole proprietors.
- Types of Bankruptcy: Individuals typically choose between Chapter 7 and Chapter 13, while businesses often file for Chapter 7 or Chapter 11.
- Asset Liquidation vs. Reorganization: In personal Chapter 7 bankruptcy, non-exempt assets are liquidated to pay off debts, while Chapter 13 allows for reorganization without losing assets. In business bankruptcy, Chapter 7 results in liquidation and closure of the business, while Chapter 11 provides an opportunity for debt reorganization and business continuity.
- Debt Discharge: In personal bankruptcy, some debts can be discharged entirely, whereas, in business bankruptcy, debts are either paid off through asset liquidation or reorganized, with the business continuing operations.
Ready to Speak with a Lawyer About Filing for Bankruptcy in Baltimore? Contact Nicholas J Del Pizzo for Help!
The burden of overwhelming debt can be too much for anyone to handle, but you don’t have to face it alone. At The Law Offices of Nicholas J. Del Pizzo, III P.A. in Baltimore, our deep knowledge and extensive experience in bankruptcy law can guide you toward a fresh financial start.
Whether you're looking to file for Chapter 7 bankruptcy to wipe out unsecured debts, qualify for Chapter 13 bankruptcy to reorganize debts and stop foreclosure, or need assistance from a foreclosure attorney, our team is here to help. We understand the stress that comes with constant creditor harassment, lawsuits, and the threat of losing your home. Let us work with you to resolve these issues and regain control of your finances.
Stop the phone calls, prevent wage garnishments, and protect your assets by consulting with us today. We’ll explore your options and create a tailored strategy to fit your unique situation.