There are two basic kinds of bankruptcy law in the United States. Essentially, there is liquidation and reorganization. The two different types are available to different types of companies or individuals depending on the circumstances. For example, chapter 11 is a business bankruptcy that focuses on reorganization. Chapter 12 is also business bankruptcy, but it only applies to family fishers and family farms. That is the way most of these chapters are divided. Here are some basics.
Liquidation Plans
One of the simplest options for paying off your debts is a liquidation plan. A business liquidation plan involves you or a trustee selling off as much of your business’s assets as is necessary to cover your debts. Often the bankruptcy law in Las Vegas, NV will allow you to pay back less than you ultimately owe. That’s because your creditors want as much of their money back as possible. If they continue to demand you pay the entirety of what you owe, they might get nothing. They’ll often take a loss just to recoup some of their money.
However, bankruptcy services have limits. When you liquidate your business, you won’t have that business anymore. If you don’t want to lose your business, you’ll need a reorganization plan. Browse website for more information.
Reorganization Plans
The other type of bankruptcy law is a reorganization plan. This type of plan means that you’ll be reorganizing your debts so that there are only one or a few lump sums that you have to pay. Also, you’ll be reorganizing your business. That could mean that you liquidate some of the assets of the business or sell off entire sections of your business. However, you’ll still own the business ultimately.
These are two of the most common types of bankruptcy plans. Whether you choose a liquidation plan or a reorganization plan depends on what you’re looking for. You should ask a professional such as Newark & Newark for help.
