Bankruptcy Options for Small Business Owners
Bankruptcy is often the best option for a small business owner. Perhaps the business is struggling, but the owner wants to remain in business. Or maybe debts are overwhelming and the owner wants to close the business. Brooklyn business owners might want to consult a Brooklyn bankruptcy attorney for guidance. But for now, here are the bankruptcy options for a small business owner.
1. Chapter 13
Chapter 13 is a restructuring plan for sole proprietors. With this type of bankruptcy, the courts create a payment plan that allows the owner to repay debts while remaining in business. But the owner must qualify to file this type of bankruptcy. A Brighton Beach bankruptcy lawyer can provide more details for Brooklyn residents. But currently, a sole proprietor cannot file Chapter 13 if the have more than $394,725 of unsecured debt. And having more than $1,184,200 in secured debt also makes the owner ineligible.
2. Chapter 11
Chapter 11 is another option for remaining in business. The courts will create a plan for repaying business debts while allowing the business to remain open. This type of bankruptcy is often complicated and expensive. The owner has to decide if staying in business is a priority. If so, then any business owned by an LLC, corporation, or partnership can file Chapter 11. A sole proprietor who isn’t eligible for Chapter 13 can also choose Chapter 11.
3. Chapter 7
Chapter 7 is for business owners who are unable to repay their debts. The business is permanently closed and business assets are sold. Creditors are paid with money gained from selling the assets. Chapter 7 is available for partnerships, limited liability companies, and corporations. Sole proprietors are also able to file Chapter 7.
Contact a Bankruptcy Lawyer
The professionals at Ursulova Law Office can help Brooklyn business owners file bankruptcy. An experienced attorney can provide valuable legal advice and guidance. An attorney can also help decide which type of bankruptcy is best for the situation at hand.
