Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
A bankruptcy filing would indeed stop the creditors, however the decision to choose between a chapter 7 or 11 is complex.
If they do not want to keep the business than a chapter 7 would discharge all of their unsecured debts, but any non exempt assets can be take by the Court to pay off their creditors.
A Chapter 11 would be fine for the business, if they want to keep it.
A Chapter 11 would be fine if they want to save their business as it would reorganize their debts and create a plan to pay the creditors off at some percentage.
If the debt is personal debt the chapter 7 would be better as their personal debt would be discharged, typically a chapter 11 is for corporations to reorganize their corporate debt.
If the business is a corporation cna the creditors attach any personal assets
If their is no personal guarantee the creditors can only go after the Corporate assets.
If all the debt is corporate, then they can let it go and not even file bankruptcy, if they want to keep the business open than a chapter 11 should be considered.
What do you do then when the creditors are calling
if you dont have a method of getting them off your back
You can contact them and advise them you are filing bankruptcy and that you will file a complaint with the Federal Trade commission for unlawful debt collection as well.
will that affect your personal credit score
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
Debt collectors also are prohibited from saying that:
Debt collectors may not:
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
A person credit score can only be affected if the debt not paid is personally guaranteed, if it is corporate debt than their credit score will not be hurt.
A bankruptcy if filed personally would hurt their own credit score, but a chapter 11 does not if it is a corporate filing.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).