Filing for bankruptcy does not have to mean the end of your business, it can be used to help keep your doors open while eliminating and restructuring your debt. If you own a business and find yourself struggling with insurmountable debt, Chapter 7 business bankruptcy may be a viable option for you. Many business debts can be discharged successfully through an individual Chapter 7 bankruptcy case.
Which Business Debts Can Be Eliminated?
You can discharge the following types of debt when it comes to a Chapter 7 bankruptcy case:
- Medical debt;
- Credit card bills;
- Unsecured debts owned by a sole proprietor, including debts to consultants, professional and suppliers;
- Obligations the sole proprietor entered into with respect to leases and contracts, including commercial and residential property leases;
- Some legal judgments; and
- Personal loans and promissory notes.
Debts that are secured ones are those that are debts for which you have listed property as collateral. These debts do not normally get discharged in a bankruptcy, but rather, the property can be taken back if you do not make payments on the debt. Many times, if you owe more on the debt than the collateral is worth, the deficiency between the two figures can be discharged in bankruptcy.
Bankruptcy and Business
Using a Chapter 7 bankruptcy is not always the best option for all types of businesses. When the business involved is a sole proprietorship, pursuing a Chapter 7 bankruptcy may be a viable option. Essentially Chapter 7 bankruptcy calls for a business liquidation. Going through a Chapter 7 case usually requires the bankruptcy trustee to sell the assets of the business and pay off the creditors and debts according to the priority of the debts.
However, if you have a corporation or LLC, filing Chapter 7 bankruptcy to deal with business debts may not be a good plan if you wish to continue running the business after the bankruptcy is complete. In these situations, it is best to meet with an experienced business bankruptcy attorney to discuss your options, including a Chapter 13 or a Chapter 11 bankruptcy.
If you have a corporation or LLC, the legal protections offered by these types of entities will protect you from being personally liable for the debt, while the “business” will officially still stay on the hook for the debt.
Call me if you are having problems paying your debts. Having debt makes you stay up at night. It stresses you out. It ruins relationships. I went through it. Boldly, I mustered up the courage to call a bankruptcy attorney and I pressed the restart button in 2008. And even though ten years has passed since I made that decision to restart my life, I never forgot what it did for me and how it helped me start over.
It even inspired me and my law firm to become the largest filers of bankruptcies in the country and in the top two in Florida all from our offices in Orlando and Kissimmee. The Benenati Law Firm has eliminated nearly a billion dollars of debt for its bankruptcy clients, making the firm one of the top twenty filers of bankruptcy in the nation. Remember, we are local in your hometown. We make our hours convenient for our clients and offer free consultations on Saturdays (9:00 a.m. – 3:00 p.m.) along with our normal business hours throughout the week. Go to https://www.407bankrupt.com/ or call 407-777-7777 to set up a free private consultation and learn more information.
Because Life Has a Restart Button.
If you have questions on this topic or are struggling with insurmountable debt, we advise sitting down with an experienced Orlando bankruptcy attorney for a free consultation- particularly if you are facing wage garnishment or have a collection lawsuit pending. A bankruptcy attorney can advise you as to all the options available to you and detail the pros and cons of each, giving you the best advise based on years of experience helping those in similar financial circumstances.