Did you know that businesses could file bankruptcy and still remain open? Just as individuals can choose to fully liquidate assets during a Chapter 7 bankruptcy or can create repayment plans and keep some assets during a Chapter 13 bankruptcy, business owners have a number of options when seeking debt relief.
Depending on the size of your business and how your debt is structured, you might be able to choose from Chapter 13, Chapter 11 or Chapter 12 bankruptcy. Chapter 12 bankruptcy is a solution specific to the agricultural industry, and it's one of the newer forms of bankruptcy available. It lets family farmers or fisherman -- those that own smaller businesses in the industry -- restructure their debt and save their farm or business equipment from foreclosure or repossession. Chapter 12 is similar to Chapter 13, but it provides some additional niche-based protections.
Chapter 13 might be an option for small business owners, especially if they are dealing with a mix of consumer and business debt. Because Chapter 13 is already a complicated process and a mix of personal and business debt just increases those complications, it's always a good idea to work through the filing with an experienced professional. Chapter 13 lets you restructure your debt to pay back a fraction of what you owe over three to five years.
Chapter 11 bankruptcy is also a restructuring of debt, but it's designed for larger businesses or corporations. Small businesses might also benefit from Chapter 11, though, and choosing the right type of bankruptcy is critical to reducing future business litigation regarding your finances.
Our firm works with companies of all types to protect both physical and intangible assets. Just as we help you protect yourself with trademarks and patents, we can help you overcome a financial crisis with the right legal tools, including bankruptcy.
The author's opinions expressed in this article are strictly his/her own and should not be attributed to any others, including other attorneys at Klein DeNatale Goldner or the law firm as a whole.