Filing for bankruptcy is a difficult time for anyone, especially if it results in the loss of a business. Many business owners wonder if filing for bankruptcy does, in fact, mean the liquidation of their business.
The answer varies from situation to situation based on a multitude of factors. Generally, it comes down to a couple of outcomes: you are forced to liquidate your business or you may be able to keep it running.
In regards to the former, your bankruptcy trustee may suggest you close your business in order to prevent more debt after you file for bankruptcy. At the least, they may do this while they assess your assets and exemptions. Unfortunately, if it is determined that you have nonexempt assets, you will be forced to sell your business assets in order to pay off your creditors.
Bankruptcy Options May Let You Keep Your Business
The silver lining is that there are instances where you may be able to keep your business through bankruptcy.
For instance, filing under Chapter 7 might be your best bet if you are the sole owner of your business and you have little or no assets. This is because you will be able to use exemptions to protect your business and its assets since Chapter 7 discharges both your personal and business debts.
Chapter 13 bankruptcy might be the best option for a sole owner if you have an abundant amount of nonexempt assets. Under Chapter 13 your debts will get reorganized within a repayment plan and can be designed to let you keep running your business.
Now when it comes to an LLC, partnership or corporation, you will have to file under Chapter 11. It involves reorganization like Chapter 13 and will allow you to pay off large debts and ensure smaller ones are more manageable through a repayment plan.
It is important to keep in mind that regardless of which option you go through, it will impact your business and its employees in some way or another. In order to figure out which route is best for you and your business, you need to turn to an experienced attorney.
Protect Your Business With Expert NJ Attorneys
To learn more about how bankruptcy may or may not impact your business, you should contact the Law Office of Joel R. Spivack. An experienced bankruptcy attorney, Mr. Spivack is well-versed when it comes to debt relief.
He recognizes how important your business is to you and the fact that it can be a credible source of continued income after filing for bankruptcy. He will answer all your questions and make sure you are well aware of the best options available to help you with your finances.
Contact the firm today at 856-488-1200 to set up a free, face-to-face consultation.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.