In a Chapter 13 bankruptcy, the debtor pays off some or all of his or her debt through a payment plan over the course of either 3 or 5 years. This is different from a Chapter 7 bankruptcy, in which the debtor’s assets are collected and used to pay creditors, while any remaining debt is immediately discharged.

A buy-sell agreement is a contract between the owners of a business that sets forth certain triggering events that will allow the owners to exit from the business, who will be permitted or required to buy their shares, how the shares will be valued for purchase, and how any such purchase will be funded. Business owners will generally work with an attorney to navigate each of these issues in light of their specific circumstances. One-size-fits-all buy-sell agreements are inadvisable, because the facts surrounding each business and the needs of its owners are different in every situation.

Closely-held corporations and LLCs generally have a small group of owners who have intentionally chosen to do business with one another. It is frequently important to all concerned that the owners have control over who may become a partner in the business going forward. To this end, owners of closely-held corporations and LLCs will often incorporate limitations on the transfer of ownership interests to third parties into either their LLC operating agreement or a buy-sell agreement.