Filing for Bankruptcy With a Debt Collection Company
Can you file bankruptcy if you own a debt collection company? If you are a debt collection company owner considering filing for bankruptcy, it is important to understand how bankruptcy may affect your business and your finances. Chapter 7 and 11 Bankruptcy Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a common type typically used by individuals who cannot afford to repay their debts. Under Chapter 7 bankruptcy, a court-appointed trustee will sell the debtor's non-exempt assets to pay off creditors. However, if you are a debt collection company owner, you may not be able to file for Chapter 7 bankruptcy because the court may consider your business to be an ongoing concern that has the potential to generate income. In this case, the court may require you to file for Chapter 11 bankruptcy, which is a type of reorganization bankruptcy that allows a business to continue operations. At the same time, it creates a plan to repay its creditors. If you are a sole proprietor ...