Doing business can be like walking a tight rope. You can fall if you do not balance your self rightly. Rest assured, there is no harm in falling down. Businesses operate with loans and money transaction. When a business falls your revenue stops and your debts increase faster than the light. You cannot cope and you are at a loss of understanding how to escape. People often fall trap to such situation. A good legal advisor can help solve this problem. For consultation visit- Recovery Law Group.
Choosing the right path
An experienced legal advisor can analyze and suggest the best solution to overcome the debt. Filing for bankruptcy under chapter 7 can allow the debtor to clear off his debt in a one-shot, without much hassle. Yes, the business will close down, but the debtor can save his face and start afresh. The legal advisor can help file the case under chapter 7.
Is the debtor qualified to file the case under chapter 7?
A falling business can find solace from the never-ending debt by filing a bankruptcy case under Chapter 7. To start on strong foot the client must take an eligibility test before filing the case. If there is any loophole in the case, it can be dismissed, posing problems to file again. The client can test their eligibility by undergoing the means test.
The means test
The means test is the analysis of the source of income. The analysis shows that income is insufficient to manage and clear the debt. Once it is established the client becomes eligible to file the case. If the income is high the client may not be eligible. Apparently, there is a clause for high-income clients under which they can file the case. The businesses often have two types of debt,
- Personal or non-business related
- Non-consumer or business-related debt
Under this clause, if the non-consumer or business-related debt is higher than 50% of total debts, which also includes mortgage, the client is eligible for chapter 7 bankruptcy Dallas. Moreover, if the businesses do not qualify for chapter 7, they can always file a chapter 13 bankruptcy case. Under chapter 13, the client clears the decided debt amount in small batches within 3 to 5 years unlike the 90 days one-shot clearance of debt under chapter 7.
Why bankruptcy is the best solution for a sinking business?
It’s better to swim across rather than sink with the broken ship. By declaring bankruptcy, the client is able to move ahead from a sponge that could suck him entirely. Bankruptcy allows the client to wrap the business neatly with grace intact. Falling business is common, and hence people must not be afraid to come out and face the fact. Instead of sinking with the business, people can rise with a new step with bankruptcy. For more detailed information call-888-297-6203.