When financial crisis hits, there are often several options available to help an individual or business get things back on track. Chapter 7 bankruptcy, for instance, is a valuable financial tool for those in Tennessee or beyond who meet eligibility requirements. A company in another state recently determined that filing for this type of bankruptcy would be the most viable option in light of the fact that its liabilities are equal to or greater than its assets.
Other truck and trailer service companies have filed for bankruptcy
Financial analysts say that this particular company is not the only truck and trailer repair service to seek bankruptcy for debt relief this year. Chapter 7 is typically overseen by a court, even when a business owner has voluntarily filed a bankruptcy petition. What usually happens is that all of a company’s assets are liquidated.
Once that has taken place, proceeds from said sales are then used to extinguish the company’s debts. When a person or business files for Chapter 7 bankruptcy, it remains on the relevant credit report for approximately 10 years. When the 10 years is up, the record of petition is removed.
Weighing bankruptcy options
There are several reasons why a person or company might choose to file Chapter 7 bankruptcy over Chapter 13 or other options. Chapter 7 comes in handy when there is no feasible means to continue making payments toward a debt. It also enables the slate to be wiped clean so that an applicant has an opportunity to start afresh financially, which is helpful when a crisis has occurred that has caused liabilities to exceed assets. An experienced bankruptcy law attorney can help a concerned business owner or individual to determine which strategy would be best in a particular case.