Is it better to wait out then go for chapter 11?
(Advice for a close friend)
No major Assets.
Self employed – Would this effect his Corporation?
If he goes chapter 11 – (he can qualify) he doesn’t owe anything
but would have to wait 10 years before he can earn credit.
My thought. Wait it out. If his business does really well. He can pay off the debt at a reduced rate which would look alot better.
Or wait 3 years less… Because I think that goes off in 7 years right?
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wait it out and try to work through his problems!!!
is he does it he should go chapter 7. chapter 11 requires him to pay the debt back and still have horrible credit. he’s better of going chapter 7 and being debt free and still deal with horrible credit. i own my own business as well. email me more info so i can help you. how much debt doesn your friend owe? to whom purchase orders, etc?
Chapter 11 does permit the discharge of debts, but it is a reorganization, and it is a prolonged legal process that could be expensive. Chapter 7 is a straight liquidation, with a distribution of assets to creditors. In either case, it is extremely important that each and every creditor be notified, so that no creditor can come back later and claim you still owe them because they weren’t notified. Under the new bankruptcy laws, credit card debt is much more difficult to discharge. If you are in financial trouble now, your creditworthiness might actually improve after a bankruptcy, because your debt is reduced or eliminated and you are again able to make payments, but the interest rates will be higher. It is probably best, if you have the income, to work out payment schedules with your creditors — they are often willing to give you a lower interest rate if they know you are in trouble, and it is sometimes even possible to negotiate a reduction in the amount of indebtedness — and this does not hurt your creditworthiness. If you do that, one of your conditions would be that they make no adverse credit reports against you. But if you make a reayment schedule, make sure you follow it to the letter, and on time! Otherwise, they can report it as a black mark against your creditworthiness, and it will hurt you. There is also Chapter 13, which is a wage-earner’s chapter, and has different provisions that may help an employed person work things out better than a Chapter 7 or 11. The length of time people can come after you for unpaid debts varies from one state to another, from 3 years to 7 years. A bankruptcy will remain on your credit record for 10 years.