bankruptcy preference definition

[mage lang="en|de|en" source="flickr"]bankruptcy preference definition[/mage]

When a company files bankruptcy, it can for one of two reasons. One, they actually mean to liquidate and close the doors or two, are they can buy more time with their creditors to pay off existing debts.

This second type leads us to the first question a company's bankruptcy. If the said business is worth saving? A second question is, can be done about it?

Depending on the financial problems of a company is under they could qualify for one of the four chapters of bankruptcy. These are Chapter 7, Chapter 11, Chapter 12 and Chapter 13 The causes of the financial difficulties of your Company is ultimately determined by which this chapter you should file under.

Of these four chapters of Bankruptcy available, two of them are so limited, for The company we want to start with. Chapters 12 and 13

Chapter 12 Bankruptcy Petition for individuals or businesses without notice, to meet the definition a family farmer or family fisherman, determined by the U.S. Bankruptcy Courts.

Chapter 13 is only for small proprietary business. Therefore, most companies are must either file a Chapter 7 or Chapter 11 Bankruptcy petition.

Before you proceed with the selection of the insolvency of your business goes on file, you need to Your know yourself;

1. Can the company?
2. Can your company back a profit if enough time is left?
3. Plenty of time left and lower payments you can pay your existing debts while avoiding accumulation of new debt.

If you answered this yes, then your best Bet is to 11 file for reorganization or Chapter. If your reply was no chance you are need to liquidate and close doors for your business or your file for a Chapter 7-type bankruptcy.

Whatever the situation demands, you must be sure legal counsel and at the height of the situation. You may have to start from scratch, but is not a new clean start better than remain buried in debt? The choice is yours. Make it wisely.

You can also find more info on Types Of Bankruptcy. is a comprehensive resource which provide information about Bankruptcy.


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