If you are a business owner struggling with debt, you should consider consulting with an experienced bankruptcy attorney to explore your debt relief options. The attorneys at Levitt & Slafkes can review your individual circumstances and help you understand the ways you can protect both yourself and your business. A very common mistake that business owners make is waiting to discuss their business debt troubles with a lawyer. The quicker we get involved, the more likely you will obtain a positive outcome.
There are two ways a Chapter 7 filing can assist a business owner. The first is when the business owner files a personal bankruptcy which seeks relief from his or her individual liability on the business debt. The second is when the business entity files a bankruptcy.
A business owner’s debts are often closely connected with the business’s finances. Many times the type of debt that the business owner wants to eliminate is the debt that he or she owes personally and not the debt that the entity owes. Important to note is that a business owner can file for bankruptcy protection without forcing the business to close. In fact, a personal bankruptcy often helps the owner eliminate debt and improve the business’s chance of succeeding. Once the business owner obtains a fresh financial start, it can also work to revive the business as well.
A business which is a separate legal entity such as a limited liability company or corporation, can file a Chapter 7 bankruptcy. Before a bankruptcy petition can be filed on behalf of a business, the owners must hold a meeting to enter a resolution to seek bankruptcy relief. This type of filing can be confusing because it is an option typically used by a business that is overwhelmed by debt and needs to shut down. It is important to note that a business that wants to reorganize its debt, restructure and remain open can file a Chapter 11 bankruptcy.
When a business files a Chapter 7, it is not entitled to discharge its debt. However, it does receive the benefit of the automatic stay which halts all collection efforts against the business entity. The trustee appointed to administer the filing will liquidate any remaining business assets, review asset transfers, and permit the entity to close its doors
If you are a business owner struggling with personal and/or business debt, we are here to help. Let us help you understand all of your debt relief options and what strategy is best for you and your business.
We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..