Chapter 13 bankruptcy cannot be filed by most businesses. However, there are some businesses that can file a Chapter 13 if the business is not considered legally separate from its owner. Here’s how you can benefit from a Chapter 13 if your business falls into this category.
When Businesses Can File
Individuals are the only parties that can file for Chapter 13. A sole proprietorship is owned and run by an individual. Since all the assets and profits are controlled by one person, that business is not distinguishable from that person and is eligible for Chapter 13. In addition, some partnerships, since they are owned by multiple individuals, can also file a Chapter 13.
There are also instances where a business that is a legally separate entity from its owner can still benefit from Chapter 13. If you are personally liable for part of the company’s business debt due to personally guaranteeing the debt’s payment, you can include those debts as part of a Chapter 13.
By filing Chapter 13, your business has the opportunity to reap a number of vital benefits, including the following:
- Develop a payment plan
- Retain business assets
- Pay important creditors
- Consolidate loans
Chapter 13 bankruptcies are only accessible for individuals, but that doesn’t mean they can’t also assist some businesses. For more information on how you can file Chapter 13 as a business, contact W. Mack Rice, Attorney at Law.