Insolvency of companies can brought about by huge debts, mismanagement and current economic trends. This is the underlying rationale for applying for business bankruptcy.
Bankruptcy is a process by which businesses and individuals are given the chance under the federal court to get rid of debts or to repay debts under the protection of the bankruptcy court. A declaration of bankruptcy simply means that the business is incapable of paying his creditors.
A business declaring bankruptcy may opt for the chapter 7 where unsecured debts are removed or abolished to give the business a chance to start anew and to start the financial recovery. Chapter 13 on the other hand, provides a plan to pay secured debts.
Chapter 7 bankruptcy is also known as the total bankruptcy. It will stay in the credit report for 10 years and filing will be done only once in an eight year period. In essence chapter 7 is the easiest way to take if you want all your unsecured debts to be removed.
Chapter 13 is like a payment plan where you get to keep all your assets with the stipulation that the debts will have to be paid in three to five years time and with the amount determined by...
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