The novel coronavirus has financially impacted countless businesses across Texas and the entire country. Due to the hardship, many business owners have considered filing for bankruptcy in order to get through this difficult and uncertain time.
Filing for bankruptcy, when successful, can give you and your family the fresh start you need, free of creditor harassment. If you’re considering filing for bankruptcy protection for your business, however, there are a few things you ought to know first.
Types of Bankruptcy Protection
Simply put, filing for bankruptcy involves an individual or establishment asking for relief from an overwhelming amount of debt that they can’t afford to pay. As such, bankruptcy protection comes in a few different types, each of which is meant to meet different needs.
If you’re considering filing for bankruptcy, you will need to determine which type is right for you, and getting legal assistance can make this process a lot less complicated. In short, bankruptcy protection comes in many different types, such as:
- Chapter 7: Liquidation Bankruptcy — This allows filers to drop debt without losing assets (excluding non-exempt equity).
- Chapter 11: Large Reorganization — This allows debtors, usually large businesses, to restructure their debt to be repaid over time while their business remains active.
- Chapter 12: Family Farmers — This allows debtors with regular annual income to reorganize debts in a repayment plan.
- Chapter 13: Repayment Plan — While difficult to file, Chapter 13 allows debtors, usually individuals, to keep their home and car under a repayment plan for loans and other debt.
- Chapter 15: Foreign Cases — This allows debtors, foreign or domestic, to relieve debt in the U.S. via foreign bankruptcy proceedings.
Crucial Factors To Discuss With Your Attorney
If you’re considering filing for bankruptcy, there is one key concept you need to keep in mind: be honest. In order for bankruptcy filings to be successful, debtors must be completely transparent with their legal counsel and not withhold any information regarding finances, debts, or assets.
One of the biggest mistakes a debtor can make, and one of the biggest threats to a successful filing, is being dishonest with their attorney about how their money is made, spent, or hidden.
Being dishonest in these matters is a bad idea for several reasons. First, your attorney can’t give you the advice and services you need to have a successful filing without knowing the full picture of your finances. Second, and more importantly, withholding information in a bankruptcy filing can lead to hefty fines and is considered a federal crime.
There is no sufficient justification for withholding this information from the federal government, much less your attorney.
Bankruptcy Lawyers Working for You During COVID-19
The Brownsville bankruptcy lawyers of the Law Offices Of Phillippe & Associates have been helping individuals and businesses maneuver through difficult financial times since the 1990s by filing for Chapter 7, Chapter 11, and Chapter 13 protections.
If you’re looking for an experienced bankruptcy lawyer to assist you, your family, and your business during the novel coronavirus, look no further than the Law Offices of Phillippe and Associates. Each case is unique, and we will give your situation the attention it deserves.