Bankruptcy Options for a Small Business
Bankruptcy Lawyer Tampa, FL
If you own a small business that is too heavily in debt, you want to make certain that your personal assets are not also in jeopardy. For instance, if you are a sole proprietor or in a general partnership, business creditors may be able to come after your personal assets to help satisfy the company’s debt. Even if you have an LLC or corporation, you may be personally liable for any debts that you personally guaranteed or cosigned.
To avoid having personal finances affected by a struggling business, many owners or partners consider filing for bankruptcy. Different bankruptcy options may serve several functions for small businesses, such as wiping out any personal liability you may have for business debts, completely liquidating the entire business, or simply working to reorganize debt to help give the business a second chance.
Chapter 7 Bankruptcy
Businesses, as well as individuals, may file for Chapter 7 bankruptcy. This is generally a good option for small business owners looking to close their business and avoid any further liability for the business debts. In Chapter 7, a bankruptcy trustee will sell your business assets and use all the proceeds to pay creditors. This will help to “wrap up” your business without any lingering obligations.
Chapter 7 bankruptcy for a small business does not, however, wipe out any personal obligations. Furthermore, if you are a sole proprietor, your business is not a separate entity and so all of the business debts will be considered personal as well. Therefore, you may want to consider also filing for Chapter 7 bankruptcy on your personal behalf. That way, you can eliminate any personal liability and make use of the personal property exemptions that are not available in business bankruptcy filings.
Chapter 13 Bankruptcy
Only individuals may file for Chapter 13 bankruptcy, so this is another option for sole proprietors who are not separate entities from their businesses, as stated above. Chapter 13 is also an option for other types of business owners to eliminate personal liability for business debts. Erasing personal liability is particularly important if the business is not planning on wrapping up and closing.
Let a Bankruptcy Attorney Help You Get a New Financial Start
These are only two of the bankruptcy options for small businesses. Choosing the right type of bankruptcy filing for your business will closely depend on individual factors such as business formation, amount of personal liability, and whether you wish to try to continue your business or close your doors. Given all that is financially at stake, it is in your best interest to not attempt to file your bankruptcy petition without the assistance of a bankruptcy attorney.
A bankruptcy lawyer can help evaluate your situation and choose the option right for you. Your attorney can also ensure that there are no errors in your filing that could result in the dismissal of your petition by the bankruptcy court. Contact a bankruptcy lawyer in Tampa, FL from Ziegler Diamond Law: Debt Fighters today to set up a free and confidential consultation with a business bankruptcy attorney.