Owning your own business can give many a sense of freedom and accomplishment, but watching it flounder can bring forth a significant amount of stress. If you are considering bankruptcy, you may be wondering whether there is anyway that you might be able to save your business. There will be a number of factors to consider surrounding this prospect. Perhaps the most important, will be the type of business you have formed. This can help to inform what your bankruptcy options may be and whether you have the ability to keep your business running. If keeping your business is one of your top priorities, it’s in your best interest to speak with a bankruptcy lawyer immediately.
The Stress of Losing Your Business
The prospect of losing a business that you have built from the ground up can bring a fair share of stress and even a sense of failure. You will likely have a number of concerns:
- How you will support yourself
- Letting employees who depend on you go
- Being unable to pay your creditors
- Having fears and worry over what the future might hold
Contacting a bankruptcy lawyer is your first step towards taking action. Chances are you have attempted to make changes to protect your business from financial ruin. A bankruptcy lawyer can help you by reviewing your business and helping you to make important decisions for your future. Having a lawyer on your side can help you to review your options and determine whether you have the ability to keep your business running despite bankruptcy or, if you must close your doors.
Keeping Your Small Business
Whether you can continue operating your business will depend upon a number of factors including the type of business you have formed and the type of bankruptcy that you file. Common business formations include:
- Sole Proprietorship
- Business Partnership
- Limited Liability Company
- Limited Liability Partnership
If you have a small business that operates as a sole proprietorship, the most common types of bankruptcy filings are Chapter 7 and Chapter 13. A lawyer can help to advise you based on your specific situation and your wishes for your small business.
Chapter 7
Chapter 7 can be a viable option for a sole proprietor. Because often personal assets and business assets are combined, debts can be settled through bankruptcy. You may be able to keep your business operating if you provide a service rather than goods. This is because the services that you offer can’t be liquidated to pay off your creditors. If you provide goods, it may be difficult to keep enough assets through exemptions to keep your business running.
Chapter 13
When filing for bankruptcy as a small business, only sole proprietorships have the option to file for Chapter 13. If your business is bringing in an income, you may be able to reorganize your debts and keep your doors open through Chapter 13. Reorganizing debts allows you to present a repayment plan to ultimately pay off your debts. This is usually over the course of 3-5 years. However, you will need a lawyer to carefully consider your options to ensure that you are able to continue operating your business post bankruptcy.
Are you having difficulty turning a profit? Are you unable to pay your employees and vendors? Are you unsure of how you will get out, or if it’s possible to keep your business? When your livelihood is at stake, working with a bankruptcy lawyer in Melbourne, FL is a key next step to sorting out what the future may hold. Take the time to contact a bankruptcy lawyer before it’s to late.
Thanks to the Law Offices of Arcadier, Biggie & Wood for their insight into bankruptcy law for small business owners.
