Filing for Bankruptcy as Small Business Owner

January 21, 2019

Bankruptcy Lawyer Clearwater, FL

Owning your own business can be a significant responsibility. For small business owners, you stand to take a number of risks. You will not have the luxury of an employer to fall back on when it comes to drawing a regular paycheck. In most situations, if your business is financially struggling, you probably are as well. Unfortunately, owning your own business can be risky because so many of them can fail. Facing this harsh reality can be incredibly difficult to come to terms with.

Why do small businesses go bankrupt?

There are a number of reasons small business are forced to close up shop. When a business is unable to turn a profit, they may ultimately face bankruptcy as a result. Some of the most common reasons businesses face bankruptcy include: slower economy, mismanagement, legal issues, illness, divorce, and poor business location. In many cases, small business owners take out financial loans in order to start their business. Struggling financially may impact a business owners’ ability to stay in good financial standing with the banks they have loan agreements with. As a result to all of the challenges a small business stands to face, problems that arise may ultimately result in a small business going bankrupt.

Should I pursue bankruptcy for my business?

Knowing when to pursue bankruptcy can be a difficult decision to come to. Many small business owners hold out hope that their business will be able to recover financially from its’ lack of profit. When considering next steps, it’s important to carefully weigh your options. This is especially true when trying to make decisions regarding whether to pursue bankruptcy proceedings. If you are at risk of losing your personal assets to creditors, it may be a good time to begin considering bankruptcy. Not only can bankruptcy stop legal actions being taken by creditors with an automatic stay, you may be able to protect, and ultimately retain some of your assets.

What are my bankruptcy options?

Determining your options will depend on the type of business you have. When determining if bankruptcy is right for you, it’s almost always a good idea to speak with a bankruptcy attorney for their counsel. The type and size of your business is likely to dictate what chapter of bankruptcy you file for. Sole proprietorships have the option of choosing Chapter 7 or Chapter 13 bankruptcies. For smaller businesses, it’s not likely that Chapter 11 will be an option. Chapter 11 is generally reserved for larger corporations whose debts are larger than Chapter 13 allows.

How should I initiate bankruptcy proceedings?

When initiating bankruptcy proceedings, it’s best to speak with a bankruptcy attorney prior to making any decisions. Their counsel can prove to be invaluable when facing financial challenges. With their services, they can advise you regarding whether bankruptcy is in your best interest and the most appropriate chapter to file.

Are you a small business owner considering if bankruptcy is the right option for you? Struggling financially can be incredibly challenging to face and ultimately overcome. However, you may be able to move through the process smoothly with the help of a bankruptcy attorney. Contact a bankruptcy lawyer Clearwater, FL trusts at The Law Office of Michael A. Ziegler Law, P.L. to review your specific case to determine the best way to take back control of your financial situation.   

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About the Author

Ziegler Diamond Law: Debt Fighters, provides effective legal services to consumers in Clearwater, Florida, and throughout the Tampa Bay area who are facing home foreclosure, unmanageable debts, debt collector harassment, or other debt-related problems.