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Guru_Guy
Guru_Guy, Attorney
Category: Bankruptcy Law
Satisfied Customers: 2418
Experience:  Years of experience providing advice on bankruptcy and other alternatives to debt problems.
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I owen a business. I am running in the red. I owe credits cards

Customer Question

I owen a business. I am running in the red. I owe credits cards aprox. $15000.00. I am current with my payments. I need to know if I can file a chapter 11 or bankruptcy.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Guru_Guy replied 7 years ago.

Hello,

Is your business incorporated, or do you own it as a sole proprietorship? Also, in what State are you located?

Thanks.

Customer: replied 7 years ago.
I am incorporated. I am in the state of california.
Customer: replied 7 years ago.
Are you still there?
Expert:  Guru_Guy replied 7 years ago.

Hello,

Sorry, I was busy with another question. You can file Chapter 11 if you wish. Assuming all the debt is on corporate cards and you have not assumed personal liability, any personal assets you have should be protected. Chapter 11 will allow you to reorganize and perhaps write off some of the debt. Keep in mind however, that it will make it much more difficult to get credit in the future and there are significant legal expenses related to going through such a bankruptcy. Most businesses would not consider this option unless the debt was much higher.

If you think your company will never make money, you are better off doing a Chapter 7 to liquidate assets and get out. Chapter 11 is simply going to put a trustee on your back to do whatever is necessary to get your company to repay the debts. If debt repayment is possible, then you should do it outside of bankruptcy. Chapter 11 is the middle ground where your company could make money if only it could get out of some existing debt or other legal obligations.

I hope this helps!

__________________

Please keep in mind that information in this forum is for informational purposes only. It is not legal advice and does not constitute creation of an attorney client relationship. Before acting on any such information, you are always advised to consult with an attorney licensed to practice in your jurisdiction who can take the time to review all the facts and laws relevant to your situation.


Guru_Guy and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.
You are great thank you. Your answer was more then complete.You helped me a lot. thanks again.Can I ask one more question?
Expert:  Guru_Guy replied 7 years ago.
Sure, just post the follow up here.
Customer: replied 7 years ago.

Can I get unemployment which I have paid into if my shop is still open?

Expert:  Guru_Guy replied 7 years ago.

If you had been receiving income through the corporation and were paying unemployment insurance, and now are no longer receiving pay, and are actively looking for other work, you should be eligible to receive unemployment. If you are not actively looking for other work, you would not be eligible. You can get more details here:

http://www.edd.ca.gov/Unemployment/Filing_a_Claim.htm

Good Luck!

__________________

Please keep in mind that information in this forum is for informational purposes only. It is not legal advice and does not constitute creation of an attorney client relationship. Before acting on any such information, you are always advised to consult with an attorney licensed to practice in your jurisdiction who can take the time to review all the facts and laws relevant to your situation.