Small Business Bankruptcy If you are running a small business and are facing bankruptcy, you are not alone. There are options in bankruptcy that can help to keep your business running, or to help to liquidate and close the business. To make the best choice, you must have a clear idea of the number of options you have and the particular type of bankruptcy that can be helpful to your specific business model.
If you choose the wrong option, you may have to face a costly legal battle and your ability to retain the assets of your small business will take a huge hit. There is a good chance that you may no longer be able to rebuild and reorganize your business anytime in the future. It is very important that you consult a highly qualified lawyer before thinking of filing for bankruptcy as going for that option may not be the right one. Here is a list of the various chapters of bankruptcy and the things that you can expect under each chapter:
Small Business Chapter 7 Bankruptcy
The Chapter 7 bankruptcy is commonly known as liquidation. This is the route most small business owners take when they can clearly see that there is no future for their business and it has no significant assets. Apart from small business owners, this form of bankruptcy is also suited to sole proprietorship where the company is heavily dependent on the skills of the owner. The whole procedure is conducted pretty quickly and the debtors in all likelihood keep most of their property. The best part about this chapter is that you really do not have to pay back any portion of your debts. However, there are certain conditions that you will have to fulfill if you have to qualify for this form of bankruptcy.
Small Business Chapter 11 Bankruptcy
If you are thinking of a reorganization plan for your business and are hoping to recover it in future, then Chapter 11 bankruptcy may be the option for you. There are a lot of advantages of filing a Chapter 11 bankruptcy for example; you will get an automatic stay on all kinds of lawsuits, bank levies and foreclosures. You can keep running your business even after you have filed for bankruptcy. There is also a provision for adjusting certain interest rates. You can even borrow money for the purpose of reorganization. The dates for the payment of unsecured tax debts can also be extended for a period of up to five years.
Small Business Chapter 13 Bankruptcy
Under the Chapter 13 bankruptcy, you have to file a repayment plan with the court by giving details on how you are going to repay debts. Chapter 13 bankruptcy can be used for sole proprietorships, but it is mainly reserved for consumers. It is the best option for you if your individual assets are bound with your business assets, as you can avoid the risk of losing your house.
If you have any questions about small business bankruptcy or would like to speak to us about your options, please contact us at (813) 518-7411.
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