Small Business Bankruptcy
If your small business is struggling with debt, bankruptcy may provide some relief. Whether bankruptcy can help depends on a number of factors, including:
- the legal form of your business — for example, is your business a sole proprietorship, general partnership, corporation, or limited liability company?
- whether you are personally liable for business debts
- whether you want to close your business or keep it running, and
- how much and what types of debts you have.
In this area, you can find information on using Chapter 7, Chapter 13, and Chapter 11 bankruptcy for business debts, how to figure out if you are personally liable for business debts, whether you can get credit or loans after filing bankruptcy for your business, and whether there are nonbankruptcy alternatives to deal with business debt in your situation.
If your small business has a significant amount of debt, bankruptcy can help you reorganize your debts to save your business, wipe out your personal liability for business debts, or simply liquidate the company.
If you are a struggling small business owner, filing for Chapter 7 bankruptcy may help save your business or provide a simple way to liquidate it.
If you re a small business owner struggling with debt, Chapter 13 bankruptcy may help you reorganize your debts and save your business.
With Chapter 11 bankruptcy, a small business can restructure and eliminate debts and continue in operation.
Bankruptcy can help you whether you wish to continue or shut down your business. However, which type of bankruptcy can benefit you the most depends on your business structure and if you intend to stay in business.
Personal Liability for Business Debt
Whether you can be held personally liable for the debts of your business depends on the structure of your business and how it was formed.
Whether your spouse is liable for your business debts depends on how your business is organized and how the debt was incurred.
More Articles: Chapter 7, Chapter 11 Chapter 13
Not sure which type of bankruptcy is best for your small business? Learn the pros and cons of Chapter 7 and Chapter 13 bankruptcy.
Learn about the differences between Chapter 11 and Chapter 13 business bankruptcies.
Your Credit After a Business Bankruptcy
There is nothing in the bankruptcy law that prohibits you from starting a new business after bankruptcy. In fact, you might be able to apply some lessons learned from your prior financial problems to keep you out of trouble in the new business.
You can probably get a business loan after bankruptcy, but it will be more difficult. Learn what steps to take to increase your chances of getting a loan.
Whether a business bankruptcy will affect your personal credit depends on whether you are personally liable for the business debt under the law.