Sherman Oaks Small Business Bankruptcy Lawyers
There are countless hurdles for small businesses. Online shopping companies like Amazon, mega retailers like Walmart, an overall poor economy, high rent, and high interest rates have all made it difficult for small businesses to stay profitable. If your business is in financial jeopardy because of debt you cannot pay off, you may benefit from bankruptcy. Bankruptcy allows businesses to maintain operations while shedding debt at the same time. Conversely, bankruptcy can be a solution to ending a business and getting a fresh start by eliminating your remaining debt. As a small business owner, rest assured that you can find help with the Sherman Oaks debt relief team at Wadhwani & Shanfeld.
What Type of Bankruptcy is Best for a Small Business Owner?
When it comes to filing for bankruptcy as a business owner, you need to ask the following questions:
- What is the structure of my business?
- Who is liable for the debt? Am I personally liable?
- Do I want to remain in business?
- Do I have a strategy for staying in business after bankruptcy?
Based on your answers to the above questions, you may benefit from Chapter 7, Chapter 11, or Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is used to end a business permanently. A trustee will be appointed by the court to liquidate your non-exempt business assets. These assets will be sold, and the earnings will go to your creditors to pay off the debt. Nonexempt assets (such as vehicles and furniture) may be kept, in some cases, to help you with a fresh start.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy allows a financially viable business to remain open (the business has a good revenue stream but too much debt). You and your attorney will submit a debt reorganization plan in a Chapter 11 bankruptcy. If accepted, the plan will be implemented to pay off the debt in the years to come, while the business remains operational. In Chapter 11, some of the business assets can be used to pay off the debt (if the lender proposes and the court agrees).
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is used by sole proprietorships, and works similarly to how it is used by individuals. Chapter 13 requires that the business has a steady, reliable income that can be used to repay the debt over a period of years (three to five years), after which the remaining debt balance will be discharged. Chapter 13 bankruptcy allows the business owner to retain their assets, keep their doors open, and continue earning an income from their business. However, the maximum unsecured debt the business can have is $419,275, while $1,257,850 is the maximum secured debt the business can have.
Call a Sherman Oaks Small Business Bankruptcy Attorney Today
There are various types of bankruptcy that may apply in your specific case. A qualified Sherman Oaks small business bankruptcy attorney can help you determine what your goals are, and help you reach them. Call Wadhwani & Shanfeld today at 899-996-9932 to schedule a free consultation.