Tag Archives: Business Debts

Small Business Guide: Options When Filing for Bankruptcy

Bankruptcy can be a useful option for taking care of unmanageable debt for companies big and small alike. However, the types of bankruptcy that are best differ for each. Even within the domain of small businesses, the type of bankruptcy that’s best depends on the business’ circumstances. Here are the options a small business has when filing for bankruptcy. Best Options When Filing for Bankruptcy as a Small Business Chapter 7 – The only type of small business that receives a discharge of debts under Chapter 7 is a sole proprietorship. Additionally, you are still responsible for any company obligations you were liable for. With this being the case, Chapter 7 bankruptcy is best only if you are not personally liable for company debts and if you are planning to shut down. Chapter 11 – While it’s normally used for big corporations, Chapter 11 bankruptcy can successfully be used by…
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Can I File Small Business Bankruptcy to Protect My Personal Assets?

When a business is struggling, sometimes the best solution is to file bankruptcy. For many small business owners, Chapter 7 bankruptcy gives them an opportunity to walk away without taking on any personal liability. Chapter 7 Bankruptcy for Small Business Chapter 7 is often the best option for small business owners who are unable to restructure their debts and continue operating. When you file Chapter 7 bankruptcy, a bankruptcy trustee will be assigned to you, and any nonexempt property and assets will be sold. Creditors will be paid by the trustee with the proceeds from selling assets. Limited liability companies, corporations, and partnerships are all eligible to file Chapter 7 bankruptcy. Individual owners who run their business as a sole proprietorship may also be eligible depending on their income. Do I Need a Bankruptcy Attorney? Without the help of a qualified attorney, the dissolution of your business could be handled…
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Can I Be Held Personally Liable for Business Debts?

If your business starts to get into financial trouble, it’s natural to start asking questions about whether or not you can be personally liable for business debts. The answer to that question largely depends on the type of business you are running. Sole Proprietorships and Partnerships If you own a business as a sole proprietor or with one or more partners, you and the partners are 100 percent liable for your business debts. That means that if your business goes under and you have unpaid debt, creditors can and probably will go after your personal assets to repay the debt. Also, if you are in a partnership, then you and the partners are each 100 percent liable. Unfortunately, that means that if your partners are broke and have no assets, the creditors may go after you for the entire debt and not just your ‘share’. L.L.C. and Corporations Corporations and…
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