Answering Your Questions About Small Business Bankruptcy
When a small business fails, the owner is often responsible for the debts. If you are facing an unmanageable amount of business debt, The Troglin Firm in North Atlanta offers a free lawyer consultation to answer your questions.
Should I File Personal or Business Bankruptcy?
Both businesses and individuals can file Chapter 7 bankruptcy. The type of bankruptcy that is best for your situation will depend on your answers to questions such as the following:
- Is your business incorporated?
- If your business is incorporated, does it have any assets such as inventory, vehicles or accounts receivable?
If your business is incorporated, then you can file business bankruptcy. If your business does not own any assets, however, then it would be a waste of time and money to do so. Essentially, your business would be judgment-proof. You may still need to file personal bankruptcy to discharge any personal obligations for business debts.
If the corporation owns property, there is no exemption for that property under the Bankruptcy Code. However, once you get an appraisal of the property, you have the right to pay the appraised value and keep it. The appraised value may be pennies on the dollar for what you paid for it.
Am I Responsible for the Debts of My Business?
Many people create limited liability companies or corporations so they will not be responsible for the liabilities of their business. But despite these legal shields, most creditors will not provide credit to small businesses unless the owner signs as a guaranty to pay business debts.
If you have signed as a guarantor of your business's debts, you will need to file personal bankruptcy to discharge those debts, no matter how your business is organized. As an individual, you can file Chapter 7 or Chapter 13 bankruptcy to deal with personal obligations for business debts.
Free Attorney Consultation
Your initial consultation is always free at The Troglin Firm. To schedule an appointment with lawyer William M. Troglin, call 678-894-2931 (877-839-9186 toll free) or fill out the contact form on this site. We are located in the Oak Lake Office Center in North Atlanta.
