Many Missouri business owners are currently struggling to overcome serious financial problems. It is an issue to which a small trucking company in another state can relate, as its owners have recently decided to take advantage of a Chapter 7 bankruptcy to help resolve its current financial crisis. There are several types of bankruptcy, each with its own eligibility requirements, and Chapter 7 typically involves a complete liquidation of assets.
Company’s liabilities exceeded assets
The company in question has been providing refrigerated, flatbed and van trailer services for just over 20 years. The business employed approximately 19 drivers. With assets listed somewhere between half a million and $1 million, the company’s liabilities are estimated at 10 times the amount.
Eligibility criteria must be met before filing for bankruptcy
To qualify for Chapter 7 bankruptcy, a debtor must meet several criteria. For instance, the person or company filing for Chapter 7 may not have already filed for bankruptcy within a certain amount of time prior to submitting a current application. A means test is administered, as well, to determine if the applicant’s income is the same or less than the median income in his or her state.
A trustee is appointed to distribute funds to creditors
In a business situation, a trustee is designated to liquidate a company’s assets and distribute funders to existing lenders who are owed money. If a Missouri business owner believes that filing for Chapter 7 bankruptcy may be a viable option in his or her current circumstances, a consultation with a bankruptcy law attorney is a good way to get the ball rolling. Such an attorney can review a particular case and determine whether this type of bankruptcy or another program would best fit a company owner’s needs and ultimate financial goals.