Small businesses throughout the greater Kansas City area have taken a hit over the last decade as our economy has suffered.  Many small businesses simply do not have the ability to fight through debt, and often shut their doors when they can no longer stay afloat.  When it comes to owning a small business, many business owners have their life savings invested into their business.  The thought of going under can be unfathomable when you have put your heart and soul into your business.  If you are a small business owner, and you are having trouble managing and eliminating debt, bankruptcy may be a way for you to eliminate your business’ debts once and for all.

How Does Bankruptcy Work for Businesses?

Businesses have a couple of options when it comes to filing for bankruptcy.  Individuals have the option of filing for bankruptcy under Chapter 7, Chapter 11, and Chapter 13 of the United States Bankruptcy Code.  Businesses cannot file for bankruptcy under Chapter 13 with the exception of some sole proprietorships.  The key goal of all bankruptcy matters is the elimination of debt, no matter which type of bankruptcy your business may pursue.  It isn’t always easy to determine which type of bankruptcy best suits your business’ financial situation, and it is important that you consult with a legal professional to truly understand the implications, both positive and negative, of each bankruptcy option available to you.

Chapter 7 Bankruptcy

If your business is a corporation, a limited liability company (LLC), or a partnership, you may wish to file for Chapter 7 bankruptcy on behalf of your business, with the primary goal of shutting down the business in an effort to liquidate and satisfy as much unpaid debt as possible.  The business itself will not receive a discharge of the debt, and this type of bankruptcy will alleviate the need for you to negotiate with creditors.  If you are a sole proprietorship, you may file for personal Chapter 7 bankruptcy, because business matters are essentially intertwined with your personal financial matters.  Chapter 7 allows sole proprietorships to take care of both personal and business debt in the same bankruptcy proceeding, and the business may be able to continue operating even after bankruptcy.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a way for businesses to “reorganize,” so that they can continue to operate with the goal of once again becoming profitable.  With Chapter 11, you will be able to reorganize your debts and formulate a repayment plan that will enable you to satisfy your business’ debts while at the same time operating at full capacity.  Chapter 11 bankruptcy is more expensive and more complicated than Chapter 7 bankruptcy, however, if Chapter 11 best suits your business’ financial situation, the cost and time may be well worth it.             

Contact Kansas City Bankruptcy Attorney Douglas Breyfogle to Schedule a Free Consultation

Bankruptcy isn’t just for individual consumers.  Businesses file for bankruptcy all the time in an effort to get back on track and become competitive once again.  It is all too easy to give up hope if your business is struggling financially.  As such, it is crucial that you consider all of your options when your small business is facing an enormous amount of debt.  To fully understand what your options are, it is important to speak with a legal professional highly skilled in bankruptcy and other debt-related matters.  Kansas City Bankruptcy Attorney Douglas Breyfogle has more than twenty years of experience helping both consumers and businesses fight their way out of debt.  While bankruptcy is certainly one option, Mr. Breyfogle will thoroughly explain additional options that may suit your businesses’ unique financial circumstances.  If you would like to discuss your financial matter with Kansas City Bankruptcy Attorney Douglas Breyfogle, contact our office today to schedule your free consultation by calling (913) 742-8700.