When a business in Mississippi or elsewhere stumbles upon rough financial times, it can take months or even years to restore stability. In many cases, severe financial crises require measures that reach beyond cutbacks in spending or downsizing a company. A recycling business in another state recently filed for Chapter 7 bankruptcy to rectify its financial woes.
With a Chapter 7 bankruptcy, an individual or business can pay back creditors by liquidating assets. The proceeds of those sales are then used to pay off debt. This is different from a Chapter 11 or 13 bankruptcy program, which involves a restructuring of payment plan as opposed to liquidation of assets.
Chapter 7 bankruptcy was not the company’s first attempt to stay afloat
The recycling company had been promised a substantial investment several years ago, which never came to fruition. This caused a financial crisis that company owners tried to resolve through a restructured payment plan. When an individual or business files for one type of bankruptcy, there may be a waiting period before it’s possible to file under another program.
Support is available to help clients facing financial crises determine which bankruptcy options best fit their needs. Each program carries its eligibility requirements. For Chapter 7 bankruptcy, a petitioner’s income must be below the state median. Additional information regarding requirements can be obtained by scheduling a consultation with an experienced Mississippi bankruptcy law attorney.
