Many business owners have invested substantial time, money and emotions into a business.
If the business is operated as corporation, Limited Liability Company or a partnership, the owners should consider the following.
Under Mississippi law, a person may exempt ,000 of specific types of personal property; insurance payments on exempt property; income from disability insurance; most payments under a qualified pension, profit-sharing or similar retirement or disability plan; and the debtor's homestead up to the value of ,000 over and above any mortgage amount.
For secured debts such as a car loan or home mortgage, the debtor must continue to make payments on those loans to keep the asset.
Assets include real property (such as real estate), personal property (household goods, clothing, retirement funds, cash, etc.), and all other assets.Operating a Business after Filing Bankruptcy Can a Debtor (person or business that files for bankruptcy protection) continue to operate a business after filing for bankruptcy?Upon the Filing of a Chapter 7 bankruptcy, the court will appoint a Chapter 7 trustee who steps into the shoes of the debtor and literally owns the assets of the Chapter 7 business unless those assets can be protected and exempted from the trustee's reach.The trustee pays administrative claims first and in full then priority claims, including taxes.Unsecured creditors receive proportionate payments based on the amount of remaining proceeds versus the total debt owed.The Bankruptcy Trustee will assume control of the business and provide for an orderly windup of the business operations.The Bankruptcy Trustee will liquidate any assets and settle all debts owed by the corporation, LLC or partnership.Chapter 7 Bankruptcy Debtors that are corporations, partnerships and limited liability companies cannot exempt assets in the Chapter 7 bankruptcy--the business is liquidating and getting a fresh start.These business entities are not entitled to claim exemptions like sole proprietorships.If a Corporation has want to file a Chapter 7 bankruptcy.The business may elect to dissolve the corporation, LLC or partnership under state law.