Bankruptcy Options for Small Businesses
Small businesses are a driving force behind the economic health of the United States. While large corporations make up a substantial portion of the market, small businesses are still heavily relied upon, especially for smaller cities or towns with limited access to a wide variety of consumer goods. When small businesses have financial difficulties that threaten the success of the business, bankruptcy is an option for helping to get the small business back on track. Most people think of Chapter 11 as the only option for businesses when filing for bankruptcy, but this is not always the case for some small businesses.
Chapter 7 Bankruptcy
Qualifying small businesses can file for Chapter 7 bankruptcy in the same way many individual consumers can. By filing for Chapter 7 bankruptcy, all business debts are liquidated by the sale of the business’s assets. This type of bankruptcy is only available to small businesses that are unable to restructure their debt. This simply means that a business does not have the financial ability to pay off the debt. Businesses eligible for Chapter 7 bankruptcy must meet certain income requirements. Partnerships, limited liability companies, corporations and sole proprietors are all able to seek protection of Chapter 7 bankruptcy so long as income requirements are met.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is not available to all small businesses. Because only individuals can file for Chapter 13 bankruptcy, the only type of business entity that can file for this type of bankruptcy is the sole proprietorship. Further, there are particular restraints on how much debt the business can have in order to qualify for Chapter 13 bankruptcy, so it is important to seek the guidance of an experienced attorney.
Chapter 11 Bankruptcy
Many businesses choose to file for Chapter 11 bankruptcy if they either don’t qualify for Chapter 7 or Chapter 13 bankruptcy, or if they believe Chapter 11 bankruptcy is the best method for eliminating business debt. Chapter 11 bankruptcy can be expensive, time-consuming and very complicated. Also, if partnerships, limited liabilities, or corporations wish to continue operation while restructuring their debt, Chapter 11 bankruptcy is the only option to choose from.
Regardless of what option may be best for your small business, it is important to fully understand how each type of bankruptcy works. Chapter 7 bankruptcy is popular for many qualifying individual consumers and businesses because the process is very quick, while both Chapter 13 and Chapter 11 bankruptcy can be quite time-consuming. With the help of a seasoned bankruptcy attorney, you will be able to choose a bankruptcy plan that is best suited for your small business needs.
Contact The Law Offices of Georgette Miller and Associates, P.C. Today
Owning a business can create an immense amount of financial stress that can sometimes be unbearable. If your business is facing unmanageable debt, then bankruptcy might be the way for your business to eliminate debts and continue to operate. The bankruptcy process for small businesses can be more complicated than the process is for individual consumers. As such, seeking the help of a qualified Bankruptcy Attorney is essential to maximizing your ability to eliminate as much of your business’s debt as possible. At the Law Offices of Georgette Miller and Associates, P.C., our skilled Bankruptcy Attorneys have extensive experience helping both consumers and businesses successfully eliminate their debt. With offices in Philadelphia, PA, New York, New Jersey, Washington, D.C., and Baltimore, MD, our attorneys are able to provide bankruptcy legal services to numerous individuals and businesses. If you would like to speak with one of our Bankruptcy Attorneys, contact the Law Offices of Georgette Miller and Associates, P.C. to schedule an initial consultation by calling (866) 96-GMLAW.