Business bankruptcy is a situation in which a business organization has more liabilities than assets and is no longer capable of meeting its financial obligations. Any type of business can file for business bankruptcy.

Business bankruptcy can provide relief to the business owners who are overwhelmed with credit problems and cannot find any other way out of debt. However, business owners must also face the fact of losing one's business and damaging one's credit standing and endure embarrassment is a possibility. There is not much stigma attached to Business Bankruptcy because it is, in fact, used by many businesses to restructure their companies.

Though Business Bankruptcy may seem different from personal bankruptcy, they both target the same goal: a way out when all possible solutions fail to alleviate the current situation.
When a business or a company is on the verge of forfeiting payments on a debt, it is the sign for an owner or manager to know that the time has come to file for business bankruptcy.

Are there any differences between the different business bankruptcy types?

There are 2 main types of business bankruptcy: chapter 7 and chapter 13, but the latter has more advantages than the former because it is federal bankruptcy, and the law does not require the liquidation of the business itself. As an alternative, the company will have to fulfill paying the debt according to the agreement with the creditors. The company has the chance to recover from the debts and can make profits again. But any decision-making has to be pre- approved by the federal court as the business bankruptcy law stipulates.

Brandon O'Brien is the current manager of a company that filed for bankruptcy after following our professional advice and is currently following making his compulsory payments. Business bankruptcy has helped him regain the company's financial control and has given him a new way of dealing with the debt problems the company has carried for many years and has not yet solved them.

Brandon O'Brien:

What should I do after filing for Chapter 11 Business Bankruptcy?

James Banks:

Chapter 11 Business Bankruptcy allows the company to keep its assets. Nevertheless it is recommended some bonds be liquidated in order to pay off part of the debt. The amount can be reduced, and the payment will not be too high; allowing the company to generate profit after all. Regardless of what method you use to reduce the debt, the manager of the company has to regularly report to the federal court any decision made in the company.

Brandon O'Brien:

So, after filing for Business Bankruptcy, do the lawyers take care of everything?

James Banks:

Do not believe that by filing for Business Bankruptcy your financial situation will be resolved. You, as the manager will have to make sure that the company has enough cash to endure the whole filing process, and we recommend that you follow a plan in order to avoid any type of delay during the case.

One way to take care of creditors once and for all is to put them all together and set up a plan to start the repayment process. The debt will be reduced, and the creditors will see you are in the process of paying them. This creates trust and understanding as to why you file for bankruptcy.

Remember, filing for Business Bankruptcy is a serious decision, and one that should only be considered when all other options have been tried. It would be wise to seek advice from a financial and legal professional before making any sudden decisions.

We have different articles of interesting topics and current and former clients' experiences with our programs. Take a look at topics related to Business Bankruptcy, situations in which people can fall into and how to keep yourself a debt free person.

Check these links to learn more:

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Treating Pre-Foreclosure and Foreclosure Investing as a Business
Congratulations - you have decided to get into the business of investing in pre-foreclosure and foreclosure properties! And guess what? It IS a business. And just like any other business you should think carefully about your business model, devise a business plan, and get all the resources you need ... more...

The Pre-Foreclosure Business Model
An elite group of investors all over the country is reaping huge profits from the subprime mortgage crisis in pre-foreclosure investing. What do they know, and what do they do differently from everybody else who is hurting? The answer is simple: It's in their Business Model. - "Business Model" here ... more...

Finding A Perfect Real Estate Business Model In A Melt Down
There are no uncertainties that the mortgage industry is in total disarray and there are plenty of homeowners facing foreclosures and the possibilities to lose their homes. The real estate melt down is upon us with no end in site for possibly quite some time. As a matter of fact, analyst project ... more...

Why Foreclosure Consulting Business Is A Top 2008 Career
The after effects of the greatest mortgage meltdown in history have changed the dynamics of the real estate industry probably forever. Housing sales continue to slump, less future homeowners can qualify for a loan, and foreclosure filings continue to rise. Though the current snapshot of the ... more...