A woman is the sole proprietor of a small business that is about to fail. She has accrued about $75,000 in debt and is unable to pay her creditors. She has decided to file for bankruptcy so she can settle up with his creditors and move on to another, hopefully more profitable, business. With this purpose in mind, should she file under Chapter 7, 11, or 13? Explain. How will this work?
A client has maxed out his credit cards and can no longer afford to make the payments on his car. He has decided to file for bankruptcy. Should he file under Chapter 7, 11, or 13? Explain your decision.
Describe the personal property that is exempt from bankruptcy proceedings in the state or country where you live.
1. She should file under Ch 11, the business reorganization bankruptcy, but it sounds as though she is done with that business. Chapter 11 would give her time to work out the business problems with creditors being stayed. Depending on the state, she might have up to five years to work through a plan of reorganization during which time certain types of debt would have to be paid in full (payroll trust money, for example) but others would be discharged provided she paid according to the plan accepted and approved by the bankruptcy trustee or judge.
Ch 13 is not the place for her as it is mostly for wage earners with personal debt, but the huge changes in Ch 13 filings effective in ...
The 475 word solution provides insight into the different types of bankruptcy filings including a review of bankruptcy exemptions for the State of Arizona.