Bankrupting may help obtain the relief you’re seeking if your small business is drowning in debt. You will have to review some details for this option to help you understand how the process can actually help. What could affect how you proceed is the way your business is structured. There are of course other concerns to think about such as understanding who is liable for outstanding debt as well as the type of debt in question.
If you have a small business and you are considering bankruptcy, the chapter filed may depend on your intentions. As you should know, bankruptcy can help you reorganize your debt, eliminate debt or liquidate company assets to satisfy debt. A personal bankruptcy may be filed or perhaps a business bankruptcy can be completed in some cases. However, it would always depend on who is liable for business debt.
There are actually different options for you to consider for filing including Chapter 7, Chapter 11 and Chapter 13 bankruptcies. Choosing the best chapter that is suitable for your situation would vary on how your business is structured, if it is sole proprietor, limited liability company or LLC, corporation. Each chapter presents its own advantages that should be reviewed prior to filing.
Chapter 7 can be filed by a person on behalf of the business or the business itself. Chapter 13 is often filed as an individual and not as a separate entity, however if you’re the sole proprietor of your business you may file this chapter as one entity. Chapter 13 will provide you to follow a repayment schedule that is approved by the court to make payments on debt obligations. Chapter 11 is usually sought by businesses and individuals with more complex situations or has debt obligations that exceed a certain amount. To help restructure your business, you can file this chapter either as an individual or as a business if you choose to stay in operation.
Call us at (813) 200 4133 for a free discussion on bankruptcy.