For Wayne County business owners, the idea of filing for bankruptcy may seem antithetical to the very entrepreneurial spirit that drives them. One wants to hold on, keep fighting even in the face of overwhelming debt. However, for many, business bankruptcy is just the opposite of giving up the fight: it's a last-minute tactic that can turn the game around, sometimes even faster than expected.
We often write on our Wayne County bankruptcy law blog about the similarities and differences between Chapter 7 and Chapter 13 bankruptcy. Just in our last post we referred briefly to the means test required in order to file for Chapter 7 bankruptcy, which is not a prerequisite for Chapter 13. Because this is an important distinction, let's take a closer look at the means test in this post -- with the understanding that this is simply a general review and does not constitute specific legal advice.
When most Wayne County residents think about filing for bankruptcy, the images that come to mind are from the Chapter 7 liquidation process. They think of potentially losing some assets like a house or car that are used to secure debts, and they see their debts quickly swept away. Many are less familiar with what happens in Chapter 13 bankruptcy, even though it is an important option to consider.
Last week on our Wayne County bankruptcy law blog, as we were discussing the consumer medical debt crisis in this country, we mentioned how some turn to credit counseling or debt negotiation agencies for debt relief. There may, as we mentioned, be underlying concerns about the true interests or even the legitimacy of some such companies. This week, we want to highlight another situation in which Chapter 7 bankruptcy may be a better option for Wayne County residents who are seeking a fresh financial start.