There are various ways that can characterize the cases of business bankruptcy Red Deer. One of which is the Bankruptcy Code chapter wherein the case is being filed. Every chapter comes up with various goals, as well as different requirements. It is important for you to know if a type of bankruptcy is a type of non-business or business case.
Similar to us, businesses can also file a bankruptcy, which is called as business bankruptcy. There are different rules that are being enforced under the filed entity varying upon the chapter and the entity. In this post, we are going to provide you with the basic types of bankruptcy. Aside from that, we will also offer you on how a business is being treated.
Forms Of Businesses That Affects The Bankruptcy Chapter Choice
The bankruptcy type that is being filed to the business will always vary upon the business form. When we say sole proprietorship, we are referring to an individual’s owned business. A bankruptcy cannot be filed on a business proprietorship apart from its owner. However, a partnership is a unit that is separated from its partners, which might be an individual, a corporation, or other types of partnership. When we say “corporation,” it is a business that is being controlled by an individual or more. The interest of ownership is described as the shares.
• Chapter 7 Bankruptcy
Chapter 7 bankruptcy is usually referred to as a liquidated type of bankruptcy or straight up bankruptcy. It is considered to be a type of bankruptcy that is available to most anyone. It can be done easily and seamlessly. Aside from that, its prosecution is much more inexpensive compared to the other bankruptcy chapters. This is a chapter that is being utilized by both the individuals, as well as the business entities. This Chapter 7 Bankruptcy can be filed by a business proprietorship but it must be named under its owner.
• Chapter 13 Bankruptcy
The uses of Chapter 13 Bankruptcy are only limited to a business. It is due to the fact that sole proprietorship is the one that can file this form of bankruptcy. On the other hand, the partnerships are not capable of filing this case. But the individual partners are capable of filing an independent partnership. What’s good with this chapter is that it will not affect a person’s assets directly.
• Chapter 12 Bankruptcy
Chapter 12 Bankruptcy is one of the latest bankruptcy forms. It was launched way back in 1986 to fight against the economic conditions. These economic conditions usually affect both the fishing operations and the small farming ones.
• Chapter 11 Bankruptcy
This form of bankruptcy is the one that is most people think upon hearing the word “business bankruptcy.” Even though this chapter of bankruptcy is being used mostly by the business contexts, t can be used by the business. Most of the individuals are filing Chapter 11 Bankruptcy in reorganizing the debt. It might maybe because these individuals don’t want to use the limited strict payment structure of Chapter 13, or they don’t want to overdo the Chapter 13 debt limits.