Even with our recovering economy, small businesses across Pennsylvania are still feeling the effects of the latest recession. As such, it can feel like you have been struggling to keep creditors away, but perhaps you simply cannot do it anymore. If your business is failing, it may be time to file for chapter 13 bankruptcy.
Unlike some other forms of bankruptcy, chapter 13 allows you to maintain your business ownership status. Rather than liquidating your assets, you debts are essentially restructured and consolidated. This gives you a little more breathing room by making one monthly payment instead of many separate ones.
This single payment typically includes your mortgage, which will stop foreclosure. Even if the mortgage remains separate, the debt is still restructured in a way that benefits you. As long as you are making payments, you will not lose the property.
Another benefit of chapter 13 is that it could reduce the amount of debt you owe altogether. Depending on your situation, the courts could forgive as much as 90 percent of your unsecured debt, giving you more financial freedom to operate your business.
Regardless of whether any debt is forgiven, perhaps the biggest benefit of chapter 13 is a fresh financial start. Any late fees stop, and creditors work with you to make payments. The courts will set a specific time frame for you to make payments. After that time period, any unsettled debt is wiped away.
If your Pittsburgh business has seen financial hardship, chapter 13 bankruptcy may be right for you. A bankruptcy attorney may be able to assist in the process.