What should I know about filing for business bankruptcy?

Filing for business bankruptcy can be complicated and stressful, but it is sometimes necessary for small business owners in Maryland who are unable to pay their debts. Bankruptcy is a legal process that involves filing a petition for relief from debt with the U.S. Bankruptcy Court. When considering filing for bankruptcy, it is important to understand the two main types: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of assets to repay creditors, and is the most common type of bankruptcy filed by individuals. Chapter 13 bankruptcy involves restructuring the business’s debt and creating a repayment plan over three to five years. In order to file for bankruptcy, you must provide the court with a variety of documents, including financial statements, bank statements, tax returns, and other documents related to your business. You will also need to attend a meeting of creditors. During this meeting, creditors will have the opportunity to ask questions about your financial statement and repayment plans. Once the court has approved your petition, you will be required to review a repayment plan. This plan must be approved by the court and all of your creditors. It is also important to note that filing for bankruptcy can have a long-term affect on your credit rating, so it is important to speak with a qualified attorney before making any decisions.

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What should I know about filing for business bankruptcy?

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