Is Chapter 7 Bankruptcy Right for Your Small Business?

Growing pains are natural for small businesses, but when those growing pains become impossible to manage, Chapter 7 bankruptcy can be an option. Before you file the paperwork, though, it's important to stop and consider the long-term consequences.

The Craig Black Law Firm has extensive experience with small business bankruptcies and can help you work through the process. I take a personalized approach to each case, and for that reason, when you call my office, you speak directly to me. If you're a small business owner considering bankruptcy, contact me at 678-888-1778 or complete my confidential contact form.

Eligible Business Types

When you file for Chapter 7 bankruptcy, the goal is likely to have all your business debts discharged. But that isn't always an option for business owners. While sole proprietors can have all eligible debts erased with Chapter 7, that isn't an option for partnerships and corporations. For those entities, Chapter 7 closes the business and liquidates all assets.

However, Chapter 7 comes with some downsides for sole proprietorships, too. As a sole proprietor, your filing will cover all your debt, including what you owe personally. That means all non-exempt property will be liquidated to pay creditors. For that reason, it isn't always the best choice.

Debts and Assets

When you file for Chapter 7, the court asks you to list your debts and assets. Before filing, make a list of those debts and consider whether you can work directly with creditors to reduce payments or even pay something off at a lower rate.

Another consideration before filing is your assets. Local and federal laws exempt certain property from seizure, so some of your assets may not be seized. You'll likely be able to keep your car and home, for instance, but many states have limits.

Business Viability

Typically, a business filing for Chapter 7 is at the end of the road. The court seizes assets, effectively forcing most businesses to close. If you're ready to hang the “closed” sign for good, Chapter 7 might be the best option for your business. But if you hope to get your finances in order and stick around, Chapter 7 could end things before you're ready.

For business owners who plan to keep going, the Craig Black Law Firm sometimes advises working directly with each creditor to develop a payment plan. In some cases, Chapter 11 makes more sense, helping them set up a repayment plan and keep moving forward.

How the Craig Black Law Firm Helps Businesses

The Craig Black Law Firm works with individuals and businesses interested in filing for bankruptcy. If you're a small business owner considering legal help for mounting debt, we can help.

At the Craig Black Law Firm, we work with each client to create a personalized plan to deal with your financial issues. If bankruptcy is the best option, we can help ensure your filing goes as smoothly as possible. Give us a call at 678-888-1778 or complete this confidential form.