Friday, December 2, 2016
Can I File A Personal Bankruptcy If I Also Own A Business?
Most bankruptcy cases are filed by individuals, but businesses are also allowed to seek relief under the Bankruptcy Code. The requirements are basically the same, meaning the business is unable to pay its debts as they become due. But there are some important differences to note if you are thinking about taking your company through bankruptcy.
Most business bankruptcies are filed under Chapter 11 of the bankruptcy laws. A Chapter 11 bankruptcy allows a business to do the following:
● Develop a plan of reorganization, which allows the company to continue in operations while restructuring its debt load.
● Pay creditors that the business deals with on a daily basis, and needs to continue dealing with in order to maintain operations.
A Chapter 11 case can be quite complex, so unless your business is quite large and the chances of continuing to operate are great, you might consider some of the other options available to you under the Bankruptcy Code. While Chapter 7 and Chapter 13 cases are typically reserved for individuals, if most of your business debt is in your own name, you might qualify for a Chapter 7 or 13 case. With a Chapter 7 the most likely scenario would include one where your small business is no longer viable, and you will not be making an attempt to keep your business doors open. A Chapter 13 would be an option if your company is a sole proprietorship, owned and operated by you as an individual. Filing bankruptcy for a company under a Chapter 7 or 13 can be tricky, and you will want to be sure all of your “I’s” are dotted and “T’s” crossed.
The key is to make a determination as to the possibility that your business can survive, and even thrive, in the future. If the chances are good, then it is well worth the time and effort a Chapter 11 requires. We understand how hard it can be to make a decision about a business you have grown from the ground up, and are here to help you sift through the facts and make a decision that is professional rather than personal. For help getting your business back on its feet, or in liquidating a company, contact our office today.
For more information about what to do if you are a small business owner and need to file bankruptcy, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you soon.