Palmdale Small Business Bankruptcy Lawyers
Small business owners face overwhelming challenges with succeeding in a busy, competitive environment. At times, you might take on too much debt to support your company, pay bills, and grow. When you fall behind on monthly bills, late fees and interest add up to an astronomical balance. Just as for individuals, bankruptcy may be an option to ease your debt and possibly discharge some of it. However, with the multiple options that are available, it can be difficult to know how to move forward.
The bankruptcy options for small business owners include Chapter 7, Chapter 11, and Chapter 13, and all are different. There are also specific eligibility rules to note, while the benefits of each are important factors. You can rely on Wadhwani & Shanfeld to help you navigate the bankruptcy process, as we have extensive experience with all types. Please contact our firm to set up a consultation with a Palmdale small business bankruptcy lawyer. A look at your options under these chapters is also informative.
Chapter 7
This type of bankruptcy is called discharge because you eliminate debts, but another term for it is liquidation bankruptcy. You must sell assets, and the proceeds are applied to what you owe creditors. Companies organized for limited liability will lose business assets, but sole proprietors could even lose their own personal property.
These are harsh implications for some small business owners, so Chapter 7 may only be suitable in limited situations. If you plan to close your doors entirely, it is a good way to do so quickly and efficiently.
Chapter 11
For those that intend to continue operators, Wadhwani & Shanfeld can explain why Chapter 11 reorganization might be beneficial. Your business can remain open while you work through the debt reorganization and repayment plan. With many small business filers, this type of bankruptcy results in paying back a lower amount on the debt, and some debt could be eliminated entirely. Chapter 11 is very similar to Chapter 13, except for businesses instead of individuals.
Chapter 13
The sole proprietor of a company is an individual in the eyes of bankruptcy laws, and this form is the proper route in such a case. It is a wage earner’s bankruptcy, because you must have a regular source of income to qualify. However, you will not put assets owned by you or the company at risk. Chapter 13 involves a debt repayment plan, where you combine all debts into a single monthly payment you can afford. You make payments under this plan for three to five years. Our Southern California bankruptcy lawyers can go into further detail on what to expect.
Trust a Palmdale Small Business Bankruptcy Lawyer for Advice
This overview of Chapter 7, Chapter 11, and Chapter 13 bankruptcy for business should help you understand the basics. However, you will need assistance when filing your case. Our team at Wadhwani & Shanfeld assists with all types, so please contact us to schedule a consultation in Southern California today.
