With National Start a Business Month on the way in March, keep up with your business acumen and learn how to eliminate your business debt in case things do not go as planned. Bankruptcy Code has some built-in flexibility for dealing with business debt. In this article, we will be taking a closer look at business debt resolution via Non-Consumer Debt Chapter 7 bankruptcy.
The most important information you need to know is this: If 50% or more of your unsecured debt is business related, you can qualify for a Non-Consumer Debt Chapter 7. A Non-Consumer Debt Chapter 7 bankruptcy has all the same functions as a normal Chapter 7 except that you can qualify for a Non-Consumer Debt Chapter 7 even if your income is high. Normally, there are income limits in Chapter 7 bankruptcy where you cannot exceed a certain income level determined by the number of people in your household. The bankruptcy court has specific thresholds of income which are meant to keep high income earners from filing bankruptcy, but, for Non-Consumer Debt Chapter 7 cases, you may be able to avoid the income limits set by bankruptcy court. Once again, you may qualify for Chapter 7 bankruptcy even if your income exceeds the income limits of bankruptcy if 50% of your debt is considered Non-Consumer debt or business debt. You will have to adhere to the normal asset exemptions though. So, if you have 50% or more of business debt and you have $300,000 in equity in a property, your property will be at risk of liquidation since it exceeds all asset and equity exemption limits in bankruptcy court.
To learn more about how all of this works, you can contact us at 855 257-7671 to speak with a bankruptcy attorney or set an appointment for a bankruptcy consultation. Bankruptcy Law Professionals has offices in Riverside and Orange County to help you with your bankruptcy filing.