Pomona Small Business Bankruptcy Lawyer
If you own a business in Pomona and the revenue no longer covers the debt, you are weighing a decision that affects both the company and your personal finances. Wadhwani & Shanfeld is a consumer bankruptcy and debt relief law firm that handles Chapter 7, Chapter 13, debt settlement, creditor lawsuits, and business debt solutions for owners across Pomona, Los Angeles County, and the surrounding Southern California communities.
A Pomona small business bankruptcy lawyer starts with a question many owners have not asked yet: whose debt is this? When you signed a personal guarantee on a lease, a supplier account, an equipment loan, or a merchant cash advance, the business’s problem became yours. The way a business is structured, and what you personally signed, usually decides which chapter fits and whether bankruptcy is even the right tool.
For sole proprietors, the business and the owner are legally the same person, so the debts come with you into any filing. For LLC and corporate owners, the entity’s debts and your guaranteed debts may need different solutions. We sort that out in the first conversation, before anything is filed.
How Business Structure Decides Your Bankruptcy Options
The first thing a Pomona small business bankruptcy attorney looks at is whether you are the business or you own the business. A sole proprietor, freelancer, or independent contractor files a personal case, and business debts such as vendor balances, business credit cards, and equipment loans are treated like any other debt in that case. Qualifying unsecured business debt can be discharged in Chapter 7, and Chapter 13 can reorganize it into one payment.
Owners of LLCs and corporations face a split picture. The company’s own debts generally belong to the company, but anything you personally guaranteed is yours. A bankruptcy filed by the owner can eliminate or restructure those guarantees while the entity’s fate is decided separately. Sometimes the right move is winding the business down quietly, sometimes it is keeping the doors open while the personal side is resolved, and sometimes it is negotiating with creditors outside of court. We work through all of these and recommend what fits, including telling you when bankruptcy is not the best answer.
Income matters too. Chapter 7 requires passing the means test, which compares your household income to the California median for your household size and then accounts for your actual expenses. Business owners often have irregular or declining income, so the test looks at the months before filing, and how your business income is documented can change the outcome. Chapter 13 suits owners with steady enough earnings to fund a three to five year plan, especially those who are behind on a mortgage or owe tax debt that Chapter 7 cannot clear.
Why Choose Wadhwani & Shanfeld for Business Owners in Debt
Wadhwani & Shanfeld has helped more than 30,000 individuals and families resolve debt, including small business owners, across Los Angeles, Orange, Riverside, and San Bernardino Counties. The firm is led by two Board-Certified Specialists in Consumer Bankruptcy through the American Board of Certification, a distinction held by a small fraction of attorneys nationally, and the team carries more than 90 years of combined legal experience.
Raj Wadhwani, founding shareholder and partner, is a Southwestern Law School graduate who helped pilot the Best Case Bankruptcy software in 1998 and was the first attorney to file a bankruptcy case electronically in the Central District of California. Greg Shanfeld, founding shareholder and partner, earned his law degree from the University of Southern California and has handled more than 10,000 bankruptcy cases over three decades. For a business owner, that depth matters because personal guarantees, exemption choices, and the means test all interact, and errors in a filing can cost you property or your discharge.
You get direct access to an attorney from your first call, a free consultation, and fast action when a garnishment, foreclosure sale, or repossession is days away. The firm files in every division of the U.S. Bankruptcy Court for the Central District of California, and you can handle your entire case by phone, email, video, or online chat, with 100% virtual consultations available. Owners rarely have a free afternoon, so that flexibility is practical, not a convenience.
Business Debt Situations We Handle for Pomona Owners
- Personal Guarantees on Leases and Loans: A landlord or lender who cannot collect from a closed business will pursue you directly. Chapter 7 can discharge many guaranteed obligations, and Chapter 13 can spread them into a plan.
- Business Credit Cards and Vendor Accounts: Cards used to cover payroll or inventory are usually unsecured, which makes them candidates for discharge in Chapter 7 for owners who pass the means test.
- Creditor Lawsuits and Judgments: Collection firms sue business owners over supplier balances and card debt. A bankruptcy filing triggers the automatic stay, which halts lawsuits, judgments, bank levies, and garnishments.
- IRS Tax Debt: Payroll and income tax balances may be handled through IRS representation, payment arrangements, or Chapter 13, and some older income tax debt can be eliminated if it meets specific timing rules.
- Equipment, Truck, and Vehicle Loans: Work vehicles and tools are often secured debt. Chapter 13 can help you catch up and keep them, and exemptions may protect tools of the trade.
- Second Mortgages and Home Equity Lines: Many owners borrowed against their home to fund the business. A wholly unsecured second mortgage can sometimes be stripped off in Chapter 13, and second mortgage settlements are another route.
- Foreclosure Risk: When business losses have pushed you behind on the house, Chapter 13 can stop a scheduled sale and let you cure the arrears over time.
- Debt Settlement: When bankruptcy is more than you need, we negotiate directly with creditors to settle for less than you owe.
What to Do Right Now If Your Business Debt Is Out of Hand
Start by gathering what a bankruptcy attorney will actually need: recent business and personal tax returns, profit and loss statements, a list of every debt you signed for personally, loan and lease documents, and any lawsuit papers or collection letters. Do not put off opening what arrives by mail. A lawsuit has a response deadline, and an unanswered complaint can end in a default judgment against you.
Be careful with money in the meantime. Do not pay one friendly creditor or relative ahead of the rest, and do not move assets or retitle property. Transfers made shortly before a filing can be undone by a bankruptcy trustee and can cause real trouble in your case. Stop using business credit to float payroll if you already know you cannot repay it.
If you are sued, Los Angeles County cases from the Pomona area are generally heard at the Los Angeles Superior Court’s Pomona Courthouse South. Written contract and book account claims carry a four-year limitations period, and oral contract claims two years, but an expired deadline is a defense you must raise in a written answer. If you do nothing, the court can still enter judgment. A payment on a time-barred debt cannot revive it, and only a signed written acknowledgment restarts the clock on a debt that is still alive.
Bankruptcy cases are filed in the U.S. Bankruptcy Court for the Central District of California, and the division depends on the zip code of your street address, not a P.O. box. Pomona is in Los Angeles County, so confirm your division with the court’s locator. The moment a petition is filed, the automatic stay stops most collection activity, which is why we move quickly when a garnishment, a foreclosure sale date, or a repossession is close. Call before the deadline passes rather than after.
Keeping Your Property: California’s Two Exemption Systems
California has opted out of the federal exemptions, so you choose between two state systems for your whole case. One is the traditional system, which includes a homestead exemption tied to the median single-family home price in your county, bounded by a statutory floor and ceiling that adjust yearly for inflation. The other is a system with a flexible wildcard that can cover tools of the trade, a vehicle, and unused residence protection, and it often works better for renters or owners with little home equity. You must also have lived in California for at least 730 days to use these exemptions.
For a business owner, the choice is rarely obvious. Tools, equipment, and a work vehicle may be protected under one system more generously than the other, and home equity may point the opposite direction. Our board-certified attorneys work through every available exemption before you file, which is why the large majority of our clients keep what they own.
Questions Pomona Business Owners Ask About Bankruptcy
Can I file bankruptcy if my business is an LLC or corporation?
The entity and the owner are separate. The company’s debts generally stay with the company, while debts you personally guaranteed belong to you. An owner can file a personal case to deal with guaranteed and personal debt, and we discuss separately what should happen to the business itself.
Will I lose my business if I file Chapter 7?
It depends on how it is structured. A sole proprietorship’s assets are part of your personal case, though exemptions can protect tools of the trade and other property. The vast majority of our clients keep everything they own, and we review every exemption before filing.
Does bankruptcy stop a creditor lawsuit over business debt?
Yes. The automatic stay takes effect the moment the petition is filed and halts lawsuits, judgments, bank levies, wage garnishments, repossessions, and foreclosure proceedings.
Is Chapter 13 an option if I am self-employed?
Yes, if your income is steady enough to fund a plan over three to five years. Chapter 13 reorganizes debts into one monthly payment, and it can help if you are behind on a mortgage or car loan, owe priority tax debt, or earn above the Chapter 7 limits.
Can bankruptcy erase business tax debt?
Some older income tax debt can be discharged if it meets specific timing rules. Other tax debt cannot, but it can often be handled through payment arrangements or a Chapter 13 plan, and we can represent you with the IRS to stop levies.
What happens to a personal guarantee when my business closes?
The guarantee survives the closing. The lender or landlord can pursue you personally, which is why many owners file after a shutdown. Qualifying guaranteed debt can be discharged in Chapter 7 or restructured in Chapter 13.
How long does a creditor have to sue me over unpaid business debt?
For written contracts and book accounts, four years. For oral contracts, two years. The deadline is a defense you have to raise in a written answer, so ignoring a lawsuit is risky even if the debt is old.
A creditor already has a judgment against me. Can bankruptcy help?
Often, yes. A California money judgment is enforceable for 10 years and can be renewed, though newer rules limit renewal for certain smaller personal and medical judgments. Filing stops garnishments and levies, and we can address judgments already entered against you.
Can a lender garnish my wages or empty my business account?
With a judgment, a creditor can garnish wages, subject to a cap set by statute, and levy bank accounts, where an automatic exemption protects a portion of the balance. Bankruptcy stops most of this when the case is filed, and an employer cannot fire you because wages are garnished for a single judgment.
Do I have to come to an office to file?
No. We handle cases fully by phone, email, video, and online chat for clients throughout Southern California, and 100% virtual consultations are available.
Should I use a bankruptcy petition preparer to save money?
A preparer can type information into forms but cannot give legal advice, choose your exemptions, or represent you if a creditor or trustee objects. Mistakes can cost you property or your discharge, which matters most when business assets and guarantees are involved.
Serving Pomona Business Owners and the Surrounding Region
We represent business owners in Pomona and throughout Los Angeles County, including Claremont, Glendora, West Covina, and the eastern San Gabriel Valley. Just across the county line, we work with owners in Chino, Chino Hills, Montclair, Upland, Ontario, Rancho Cucamonga, and Fontana, and throughout the Inland Empire in San Bernardino and Riverside.
Our reach extends across greater Los Angeles, from Santa Clarita, Van Nuys, Sherman Oaks, and Encino through Hollywood, Santa Monica, Inglewood, Compton, Torrance, Long Beach, and Lakewood. We also serve the Antelope Valley, including Lancaster, Palmdale, and Acton, and clients across Orange County in Anaheim, Santa Ana, Garden Grove, Fullerton, Huntington Beach, Costa Mesa, and Newport Beach. Wherever your business is located, your case can be handled remotely.
Talk With a Pomona Small Business Bankruptcy Attorney
You do not have to keep guessing whether bankruptcy, settlement, or restructuring is right for you and your business. A Pomona small business bankruptcy attorney at Wadhwani & Shanfeld will review your income, debts, guarantees, and property, explain every option inside and outside of court, and tell you honestly which path gives you the best fresh start. Call today for a free consultation and speak directly with an attorney.
