Business Chapter 13
If you are sole proprietor of a small business that needs financial reorganization and has adequate income from the business and other sources to provide for your basic living expenses plus your ‘Plan Payments’ to the Chapter 13 Trustee, you may qualify for a Chapter 13 bankruptcy. Under Chapter 13, the Debtor repays creditor arrearages over a 36 to 60 month payment plan as long as your unsecured debt is under $360,475 and your secured debt is less than $1,081,400. A Chapter 13 bankruptcy allows you to keep your exempt assets and continue business as usual. The amount of debt you repay your creditors is determined by your earnings, amount owed and your basic living expenses.
Chapter 13 can be an attractive alternative to a Chapter 11 for some businesses because the cost a Chapter 13 is much less and you make only one payment to the Chapter 13 Trustee who in turn disperses the money to your creditors. The disadvantage of a Chapter 13 is that the first Plan payment must be made thirty (30) days after your case has been filed and all arrearages must be paid within sixty (60) months.
Business Chapter 13′s are more complicated and it’s important to seek a business bankruptcy attorney when considering Chapter 13 for your business. Sidney Diamond of Diamond Law is a Board Certified Business Bankruptcy Specialist.