Bankruptcy And The Small Business Owner
Many small-business owners are fearful of filing bankruptcy because they think they will lose their business. While some businesses may be at risk, many others are safe.
I’m Memphis bankruptcy attorney Ben Sissman. For more than 30 years, I have helped business owners deal with consumer and business debt. I have helped many small-business owners eliminate personal debt while saving their businesses. I offer a free initial consultation to discuss your situation and answer your questions.
Will I Lose My Business If I File Bankruptcy?
Your ownership interest in a business may or may not be at risk when you file bankruptcy. The answer depends on:
- The type of bankruptcy you file
- Whether the business has resale value
There are two forms of consumer bankruptcy protection: Chapter 7 and Chapter 13. When you file Chapter 7 bankruptcy, your personal assets up to a certain level are considered exempt and cannot be taken by the bankruptcy trustee. Any assets, including business assets, that are not exempt can be taken and sold to pay your creditors.
However, not all businesses have resale value. For example, if you own a service business, your business may have value beyond what you put into it. If the trustee cannot sell your business to another person, it is yours to keep.
If you have business assets that may be taken by the bankruptcy trustee, you can keep those assets and still obtain debt relief by filing Chapter 13 bankruptcy.
Discharging Business Debts
Many small-business owners personally guarantee business debts in order to obtain business loans and credit. As a result, business debts are a major cause of personal bankruptcy in Tennessee. If you are unable to repay the business debt that you guaranteed, you can discharge your personal liability by filing bankruptcy.
Free Consultation | Tennessee Chapter 7 And Chapter 13 Attorney
The law office of Ben Sissman is a debt relief agency that helps people file for bankruptcy relief under the Bankruptcy Code.