Small Business Bankruptcies for South Carolina
As a small business, there are two types of bankruptcies that you can file in South Carolina, depending on the situation. The two types of bankruptcies are Chapter 7 and Chapter 11. There is a new type of Chapter 11 bankruptcy, Chapter 11 – Subchapter V.
If you do not wish to continue operating the business, and your desire is to merely walk away from the business and let someone else handle the liquidation of the business, Chapter 7 is your bankruptcy. Unlike a personal Chapter 7 bankruptcy, there are no exemptions for a company. In a Chapter 7 bankruptcy for a business, you basically provide all of the books, records, information and keys for the business to the attorney who prepares the petition, schedules and statements which you sign under penalty of perjury, and a Chapter 7 trustee is assigned to the case. A Chapter 7 trustee proceeds with seizing the assets of the company and selling them to pay the creditors of the company.
- Chapter 11 bankruptcy provisions are complex, and require in person consultation to thoroughly explain and discuss. However, the following is an extremely simplified explanation of Chapter 11.
- Basic Requirements
- Company must be registered in South Carolina
- Complete the petition, schedules, statements, reports and related documentation.
- Attend the meeting of creditors and any other mandatory court hearings.
- Income sufficient to fund a plan of reorganization
- Pay the filing fee of $1,738.
- Benefits
- Priority Tax Debt
- Chapter 11 bankruptcy can enable the individual to negotiated an installment agreement to payoff delinquent tax debts without incurring penalties and depending on the circumstances even pay less than the principal owed to discharge the tax debts.
- Secured Debt
- Chapter 11 bankruptcy can enable the individual to modify the mortgage or other secured debts to only payoff the current fair market value of the property securing the debt at a reasonable rate of interest.
- Unsecured Debt
- Chapter 11 bankruptcy can enable the individual to restructure the debt to only repay 10% of the unsecured debt amounts.
- Lease or Executory Contracts
- Chapter 11 bankruptcy enables the individual to cancel or amend any current leases or executory contracts without any penalties or interest.
- Priority Tax Debt
- Basic Requirements
