Can Chapter 7 Bankruptcy Help Small Business Owners?
Filing for bankruptcy as a small business owner can be a complicated process. In some cases, filing for bankruptcy may endanger the future of the business. However, this is not always the case. In some situations, bankruptcy can provide the financial freedom a person is looking for without shutting down their business.
If you are considering bankruptcy but are unsure about how your filing may affect your small business, do not hesitate to consult with a skilled and experienced lawyer. Contact the Birmingham Chapter 7 bankruptcy attorneys of Greenway Bankruptcy Law, LLC, at (205) 324-4000 to discuss your situation with a compassionate and capable legal representative.
Can You File for Chapter 7 Bankruptcy as a Small Business Owner?
Depending on the business, a person may not be able to file for Chapter 7 bankruptcy as a means to protect both themselves and their business from creditors. This connection can be severed, however, making a small business owner’s business responsibilities different than their personal financial responsibilities.
A person may be held personally liable for their business in the following situations:
The business is owned solely by the filer
The business is owned in a partnership that includes the filer
Contracts for the business are personally signed by the filer
The filer makes a personal guarantee to financially protect the business
In these situations, whatever debts are owed by the business are inextricably tied to the personal interests of the owner or partner. This can make business bankruptcies for small owners practically like personal bankruptcies, as personal assets can be seized in these cases. As a result, the business may be unable to continue.
If you are a small business owner whose personal finances have become wracked by overwhelming debt, bankruptcy may be able to help you to move on with your life. Contact the Birmingham Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC, by calling (205) 324-4000 today to speak directly with an attorney who can advise you of your options.