What Bankruptcy Options Do I Have For My Business?
Owning and operating a business can lead to a whole new set of financial issues. If you have been falling behind in business expenses, it can be a stressful and frustrating process trying to decide if your business will be able to make it.
There are steps that you can take to keep creditors off your back and regain a normal life. Take the following tips into consideration if you can no longer pay your business debts.
Sole Proprietorship and Partnerships
If you own a business as a sole proprietor or partnership, you will be personally responsible for your business debts. These debts become your personal debts. This means that creditors will have access to your personal assets such as your bank accounts.
LLCs and Corporations
If your business is organized as a multi-member LLC (limited liability company) or corporation, your business may be protected from creditors. Unfortunately, there are ways in which you may have sacrificed your personal asset protection. If you have signed away your limited liability, you will be financially responsible for business debts.
If you are a business that is struggling to make payments, you may be eligible to file for bankruptcy. Depending on your business, you will need to file for one of the following chapters of bankruptcy.
Chapter 7 Bankruptcy
Sole proprietorships, LLCs, corporations and partnerships are able to file.
- With this form of bankruptcy, your property above the allowable level (exemption) will be sold to pay your creditors.
- A bankruptcy trustee will sell eligible property in order to pay for personal debts.
- Your debts may be discharged after bankruptcy.
Chapter 13 Bankruptcy
Sole proprietorship keep in are able to file.
- You will need to propose a repayment plan schedule. This will outline when and how you plan to pay back your debts.
- This report will be based on the income that you bring in.
- None of your property will be sold under Chapter 13 bankruptcy.
- You may be able to pay off debts for up to 5 years.
Chapter 11 Bankruptcy –
Sole proprietorships, corporations, LLCs and partnerships are able to file, but it is costly. This is recommended for corporations and LLCs.
- This form of bankruptcy helps a business re-organize its debts.
- A business works with creditors to change terms of loans and interest rates.
- You will usually pay less for your debts.
- The goal of Chapter 11 bankruptcy is to allow a business to continue running with a newly managed financial and debt plan.
It is important to speak with a qualified bankruptcy attorney to better understand your business’s financial situation.
Where to get help? Call Geygan & Geygan
If your business is considering bankruptcy, it is important to speak with a qualified bankruptcy attorney. You can better understand your options and the laws related to bankruptcy with the help of the experienced attorneys of Geygan & Geygan.
If you are looking for an experienced law firm to guide you throughout a bankruptcy case, contact Geygan & Geygan.
Call (513) 793-6555, or email firstname.lastname@example.org. Our office is located in the Kenwood area of Cincinnati. CALL NOW!