Lancaster Small Business Bankruptcy Lawyer
Wadhwani & Shanfeld works with Antelope Valley business owners who are behind on the debts of the business they run, whether that means a trucking operation, a contracting company, a restaurant, a retail shop, or a one-person service company. The firm is a consumer bankruptcy and debt relief practice that handles Chapter 7, Chapter 13, debt settlement, creditor lawsuits, wage garnishment, and IRS tax debt for clients in Lancaster, Palmdale, Acton, and across Los Angeles County and Southern California. If you need a Lancaster small business bankruptcy lawyer, the first question is not which chapter to file. It is whose name is on the debt.
That question drives everything. A sole proprietor and the business are the same legal person, so every business debt follows you home. An owner who signed a personal guarantee on a loan, a lease, or a supplier account owes that money personally even if the company is an LLC or corporation. Business bankruptcy for a small operator is often really a personal bankruptcy with business debt inside it, and the strategy depends on separating what the company owes from what you owe.
The sections below cover how that analysis works, which property of yours is protected, what to do when a creditor has already sued, and which court will hear your case.
Why Lancaster Owners Choose Wadhwani & Shanfeld for Business Debt Relief
Wadhwani & Shanfeld has helped more than 30,000 individuals, families, and small business owners resolve debt through bankruptcy, settlement, and negotiation. The firm is led by two Board-Certified Specialists in Consumer Bankruptcy through the American Board of Certification: founding shareholders Raj Wadhwani and Greg Shanfeld. Together with their team they have more than 90 years of combined legal experience, and they serve clients throughout Los Angeles, Orange, Riverside, and San Bernardino Counties, including the Antelope Valley.
Greg Shanfeld has handled more than 10,000 bankruptcy cases over three decades, a useful background when a business owner’s finances are tangled between personal and company obligations. Raj Wadhwani, a Southwestern Law School graduate, 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 earned his law degree from the University of Southern California. The firm files in every division of the U.S. Bankruptcy Court for the Central District of California, so the paperwork lands in the right place.
For an owner with a payroll to meet, a landlord on the phone, or a lender threatening a lawsuit, the practical differences matter. You speak with an attorney from your first call. The firm moves fast when a garnishment, foreclosure sale, or repossession is days away. Consultations are free and can be done 100% virtually, and cases can be handled fully by phone, email, video, and online chat, which helps when you cannot close the shop to sit in an office. The firm will also tell you when bankruptcy is not the right answer, because it handles settlement, IRS representation, and loan modification as well.
Business Debt Situations We See From Lancaster Owners
- Sole Proprietorship Debt: With no legal wall between you and the business, supplier balances, business credit cards, and equipment loans are all personal debts. Chapter 7 can discharge the unsecured ones, and Chapter 13 can restructure them if your income is steady.
- Personally Guaranteed Loans and Leases: Many small business loans and commercial leases require the owner to guarantee payment. If the company closes, the lender or landlord comes after you. A guarantee is generally an unsecured personal debt that bankruptcy can address.
- Merchant Cash Advances and Online Lender Debt: High-cost advances with daily withdrawals drain operating cash quickly. When the owner guaranteed the advance, the balance can often be included in a personal filing, and the automatic stay halts collection.
- IRS Tax Debt: Unpaid income taxes and self-employment taxes weigh on many owners. Some older income tax debt can be discharged if it meets timing rules, and the firm also represents clients with the IRS to stop levies and set up payment arrangements. Payroll tax liabilities are a separate and more difficult category that needs a careful review.
- Creditor Lawsuits and Judgments: Suppliers, lenders, and landlords sue when payments stop. Filing bankruptcy halts the suit, and the firm also helps with judgments already entered, including bank levies and wage garnishment.
- Vehicle and Equipment Loans: Work trucks, vans, and tools are often financed. Chapter 13 can help you keep a financed vehicle while catching up, and repossession deficiencies can be discharged.
- Home Secured Debt Tied to the Business: Owners often borrow against the house to fund the business. If you are behind on the mortgage or a second mortgage, Chapter 13 may stop a foreclosure sale, and the firm also handles loan modification and second mortgage settlements.
- Winding Down a Failed Company: When the business is closing, the question is what you personally still owe afterward. The firm reviews the guarantees and the company’s remaining obligations so you close it with a plan.
What to Do When the Business Is Behind and Creditors Are Closing In
Start by sorting your debts into two piles: those in the company’s name only, and those you signed for personally or guaranteed. Gather loan agreements, leases, supplier contracts, tax notices, recent bank statements, and any lawsuit papers. A bankruptcy attorney needs this to see which debts follow you and which stay with the entity.
If you have been served with a lawsuit, do not ignore the deadline. A default judgment can lead to a bank levy or a wage garnishment. The expired statute of limitations is a defense you must raise in a written answer, or the court can still enter judgment. For a written contract or book account, the window to sue is four years; for an oral contract it is two years. A payment on a time-barred debt cannot revive it, and only a signed written acknowledgment restarts the clock. Cases in the Antelope Valley are heard at the Lancaster courthouse of the Los Angeles County Superior Court, and responding on time keeps your options open, including filing bankruptcy before a judgment is entered.
Be careful with your accounts. Once a creditor has a judgment, they can levy a bank account, and California automatically shields a limited amount in a deposit account from a levy without any claim of exemption, though that protection does not apply to debts for wages owed to another, support, or amounts owed to the state. Do not move money to relatives or pay one friendly creditor in full before filing; those transfers can be unwound by the trustee and create problems. Likewise, avoid running up new business credit cards you cannot repay, since recent charges invite scrutiny.
If a sale date or garnishment is near, call right away. Filing triggers the automatic stay, which halts lawsuits, judgments, bank levies, wage garnishments, repossessions, and foreclosure proceedings the moment the petition is filed. In a California foreclosure, a notice of sale must be mailed and posted at least 20 days before the sale, and a missed monetary default can be reinstated until five business days before the sale date, so a few days can change what is possible. For repossession, the lender must give at least 15 days’ written notice before disposing of the vehicle, and you can ask in writing for a 10-day extension of the redemption period.
Protecting Your Home, Truck, Tools, and Paycheck
Owners worry most about losing the assets that let them keep earning. California does not use the federal bankruptcy exemptions. Instead, a filer chooses one of two state systems and must stay with that choice for the whole case. One system offers a large homestead exemption that adjusts annually and is tied to the county median home price, with a statutory floor and a ceiling, which tends to favor homeowners with equity. The other, the wildcard system, provides smaller set amounts for a residence, a motor vehicle, and tools of the trade plus a flexible wildcard that can cover almost any asset, and it often works better for renters or owners with little home equity. To use California’s exemptions, you generally must have lived in the state for at least 730 days.
For a tradesperson or small operator, the tools-of-the-trade protection and the vehicle exemption can decide whether the business survives a Chapter 7. The firm works through every available exemption before you file, and the vast majority of its clients keep everything they own. If the numbers do not fit, Chapter 13 lets you protect assets beyond what exemptions cover by repaying creditors over three to five years.
Chapter 7 or Chapter 13 When You Own the Business
Chapter 7 eliminates qualifying unsecured debt, including credit card balances, personal loans, repossession deficiencies, medical bills, and many personally guaranteed business debts. Most cases finish in roughly four months. The means test compares your income to the California median for your household size. Owners with primarily business debts are sometimes treated differently on the means test, which is one reason a careful classification of your debts matters before you file.
Chapter 13 suits owners with steady income who want time and structure. Your debts are reorganized into one monthly payment over three to five years, and creditors are bound once the court confirms the plan. It can stop a foreclosure, catch up missed mortgage or car payments, deal with priority tax debt, and in some cases strip off a wholly unsecured second mortgage. The tradeoff is that your business income has to support the plan payment through the full term, so realistic projections matter.
Sometimes neither is the best fit. Debt settlement lets the firm negotiate directly with a lender for less than you owe, and IRS representation can stop levies without a filing. The recommendation depends on what actually works for your situation.
Common Questions From Lancaster Business Owners
Can I file bankruptcy if my business is an LLC or corporation?
The company and you are separate legal entities, and this firm focuses on consumer bankruptcy for individuals and families. If you personally guaranteed the company’s debts, those guarantees are your debts and can be addressed in your own filing. The firm reviews how your business is structured to decide how to proceed.
Will bankruptcy shut down my business?
Not necessarily. Many owners keep operating through a Chapter 13, and in Chapter 7 the outcome depends on what business assets you own and whether they are protected by exemptions. The review of your property comes before any filing.
Does a personal guarantee survive if the business closes?
Yes. Closing the company does not erase a guarantee you signed. The lender or landlord can pursue you personally, which is why the guarantee is often the real reason owners file.
What business-related debts can be discharged?
Most unsecured debts can be discharged, including business credit cards, supplier balances, personal loans, and deficiency balances after repossession. Some older income taxes can be eliminated if they meet timing rules. Child support, alimony, most student loans, most government fines, and debts for injuries caused by drunk driving generally cannot be discharged.
How fast can bankruptcy stop a lawsuit, garnishment, or levy?
Immediately upon filing. The automatic stay takes effect when the petition is filed, and creditors must stop collection activity. In an emergency, the firm can often prepare and file quickly to stop a sale or levy.
Will I lose my house if I file?
Most clients keep their homes. In Chapter 7 the question is whether your equity is covered by California’s homestead exemption. If you have more equity than the exemption protects or you are behind on payments, Chapter 13 lets you keep the home and catch up over time.
How long does a creditor have to sue me on a business debt?
For a written contract or a book account, four years; for an oral contract, two years. The deadline is a defense that you must raise in a written answer. A new payment does not revive a debt that has already expired.
My bank account was levied. Is any money protected?
California automatically protects a set amount in a deposit account without you filing a claim, and the bank must apply it before turning money over. The amount adjusts periodically, and the protection does not apply to levies for wages owed to another, support, or debts owed to the state.
How much of my paycheck can a creditor take?
For an ordinary judgment, garnishment is capped at the lesser of 20 percent of weekly disposable earnings or the amount by which those earnings exceed 48 times the minimum hourly wage, with 96, 104, or 208 times used for biweekly, semimonthly, or monthly pay. You can also claim an exemption for the portion of earnings needed to support your family. Filing bankruptcy stops most garnishments, and an employer cannot fire you because wages are garnished for a single judgment.
How long does a judgment against me last?
A California money judgment is enforceable for 10 years and can be renewed for another 10 years.
Can I be sued under the Rosenthal Act for collection abuse?
Debt collectors who harass you can be liable under California’s Rosenthal Act, which covers original creditors as well as third-party collectors. You can recover actual damages and an additional $100 to $1,000 for willful and knowing violations, plus attorney fees, but you must sue within one year. A collector can avoid liability by correcting a curable violation within 15 days.
Do I have to come into the office?
No. The firm handles cases fully by phone, email, video, and online chat, and consultations can be 100% virtual. That is practical when running a business leaves little free time.
Which Bankruptcy Court Hears Your Case
The U.S. Bankruptcy Court for the Central District of California covers Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, Ventura, and San Luis Obispo Counties. Your filing division is set by your street address zip code, not a P.O. box. Lancaster, Palmdale, and Santa Clarita appear on the San Fernando Valley Division community list with footnotes, so the zip code should be confirmed with the court’s locator before assigning a division. The Wadhwani & Shanfeld team handles that determination for you, since the firm files in every division.
Serving Lancaster and Antelope Valley Business Owners
The firm represents business owners and individuals in Lancaster and throughout the Antelope Valley, including Palmdale and Acton, as well as nearby Santa Clarita. Across Los Angeles County, clients come from Los Angeles, Sherman Oaks, Van Nuys, Encino, Woodland Hills, Reseda, Northridge, Granada Hills, North Hollywood, North Hills, Mission Hills, San Fernando, Sylmar, Hollywood, Santa Monica, Long Beach, Lakewood, Torrance, Compton, Inglewood, Norwalk, Bellflower, Paramount, Gardena, Cerritos, Cypress, Signal Hill, and Huntington Park.
The firm also serves the Inland Empire and the eastern San Gabriel Valley, including Ontario, Rancho Cucamonga, Upland, Riverside, Fontana, San Bernardino, Pomona, Chino, Chino Hills, Montclair, Claremont, Glendora, West Covina, and the Coachella Valley. In Orange County, it represents clients in Anaheim, Santa Ana, Garden Grove, Buena Park, Fullerton, Huntington Beach, Westminster, Costa Mesa, Newport Beach, Tustin, La Habra, Placentia, Mission Viejo, and Laguna Niguel.
Talk With a Lancaster Small Business Bankruptcy Attorney
You do not need to wait for a lawsuit, a levy, or a sale date. Call Wadhwani & Shanfeld for a free consultation and speak directly with a Lancaster small business bankruptcy attorney about what you owe personally, what you can keep, and whether Chapter 7, Chapter 13, settlement, or another route fits your situation. The firm will tell you honestly which path gives you and your business the best chance to start over.
