If you own a business, you might think that filing Chapter 13 as a business is out of your reach, since Chapter 13 bankruptcy applies to individuals, whereas Chapter 11 bankruptcy is for companies. You may, however, file this way if you personally owe for business-related debts. The exceptions are stock and commodity brokers.
There are a number of qualifications for filing Chapter 13 bankruptcy
- Sufficient Income – Even though you are released from some of the pressures of debt collection by filing bankruptcy, you must prove that you have sufficient income to pay off debts. This income can be derived from:
- Business income
- Personal income
- Public benefits
- Limited Debt – You can have a certain amount of debt, but it cannot be too high. The limit to the debt may depend on what the judge decides and where you live.
- Current Income Taxes – All income taxes must be filed and be up to date.
If the above conditions are satisfied, you are likely to keep your business and other assets. If you are a sole proprietor, creditors cannot forcibly collect the money from co-signors and guarantors. However, if you have a corporation or a limited liability status, creditors can take the money from the corporation or the limited liability company. For more information on how to file Chapter 13 as a business, contact Lynch & Belch P.C. in Indianapolis at 317-888-0006.