Filing for bankruptcy can help you if you are either shutting your business doors, or wanting to stay open. However, Skrupa Law Office LLC’s bankruptcy attorneys can help you determine which kind of bankruptcy would benefit you the most, Chapter 7, Chapter 11, or Chapter 13. The first question to ask yourself is “should I continue my business?” While this can be a difficult and very emotional question to ask, it is extremely important to know what the next best step is. Below, our bankruptcy lawyers at Skrupa Law have provided a few other questions to ask yourself before you decide to close or keep your business open.
Are you personally responsible for the debts the business has acquired?
If you are personally responsible for the debt acquired, Skrupa Law advises you to keep your business open while talking with your creditors, otherwise if you close, the creditors could go after your personal things. If your business has more assets than liabilities, there’s a good chance you could still save it.
Does your business make a profit?
If your business is still making money, but have just had a few hard months where you couldn’t cover your bills, then you should stay open. However, if you are losing money with no way to turn things around, it’s probably not productive to remain open for business.
What Type of Bankruptcy Should you File for?
If you want to continue your business, Chapter 11 or Chapter 13 are possibilities. If you are closing your business, our bankruptcy attorneys at Skrupa Law would typically advise you to file for Chapter 7 as it liquidates all the business’ assets and distributes the money among your various creditors. Chapter 7 may also be helpful if you are the sole proprietor of your business (that is, you both own and operate the business). This way your business and personal debt is wiped away all at once. However, if some of your assets are non-exempt, then this may not be your best option.
Remember if you are a sole proprietor, Chapter 13 bankruptcy can also eliminate both your personal and business debt. If you have many non-exempt items, Chapter 13 allows you to keep those items and follow a repayment plan instead.
Chapter 11 bankruptcy is typically for those businesses that are corporations, LLCs, or partnerships. However, sole proprietorship can file Chapter 11 bankruptcy also. Chapter 11 allows assets to be kept and the creditors to be paid back in a repayment plan instead, but Chapter 11 is more complicated when you want to keep your business open.
Contact Skrupa Law Today at (402) 512-6094 in Omaha and (402) 464-3311 in Lincoln
At Skrupa Law we know your business is important to you and we’d like to do what we can to help in this trying time of your life. Whether you want to close your business or keep your doors open, we know your best options. Contact our Omaha office at (402) 512-6094 or in Lincoln at (402) 464-3311 to find out more.