The Federal Rules of Bankruptcy Procedure and local rules of each bankruptcy court govern the bankruptcy process. Each of the 94 different federal judicial districts handles its own bankruptcy matters. Types of bankruptcy There are six types of bankruptcy, each named after the chapter that outlines it in the U. While there are some benefits to filing for bankruptcy, there are also numerous disadvantages.The process is overseen by the Bankruptcy Court, which is part of the U. The most damning aspect is that it ruins the debtor's credit.

Is your business facing pressure from its creditors?

When creditor pressure mounts and your company is unable to pay its bills on time, there’s a serious chance that it’s on the path towards insolvency and liquidation.

Most importantly, it offers a way to eliminate the debt owed or come up with a set plan on how to repay all or some of it.

Throughout the process, debtors are protected by the federal courts from any legal action that creditors may try to impose.

Bankruptcy is a legal process by which individuals or businesses can publically declare that they are unable to pay all their bills, as a way to help them get out from under their debt.

Bankruptcy laws help people and businesses get a fresh start financially by having their assets liquidated in order to pay off their debts, or by creating a repayment plan.

If the property is not exempt, it will be sold and used to pay off the outstanding debts.

Additionally, after filing for bankruptcy, debtors are prohibited from taking on a management role with a limited liability company – and it can cost hundreds or thousands of dollars in legal and court fees, depending on how long the process lasts.

Cash flow problems are very common in most businesses these days, sometimes these cash flow problems get more serious and your business is no longer solvent.