When there’s no other way for the business to remain afloat, then you can consider filing for bankruptcy. It’s identified as starting new while you settle all your obligations by legal means. You can avail of four forms of bankruptcy.
Each of these bankruptcy laws has been taken from the bankruptcy code, and they possess particular parameters that must be fulfilled for the debt to be considered ended.
Debt repayment (chapter 13), family farmer or fisherman (chapter 12), reorganization (chapter 11), as well as liquidation (chapter 7) are the fundamental kinds of bankruptcy. Bankruptcy laws are treated differently and so should be the kinds of bankruptcy.
The chapter 7 assures payment of debts through assets owned by the debtor. Properties and equipment shall be evaluated by a court appointed trustee. He also keeps the assets. If these assets are assessed and their worth known, they would be transformed into cash.