Whether you want to close down your business or keep it in operation, a bankruptcy attorney in Cornelius NC can help. Your bankruptcy needs depend on your intentions and the structure of your business. In this guide, you will learn more about the considerations you’ll make when deciding whether to continue operations, and you will also learn how filing for bankruptcy can help.
Should you Close, or Continue Operations?
You’ll have to consider many financial and personal factors when making this decision, such as:
- Your profit level: If you’re constantly losing money and can’t attribute it to a slow period, it may be time to cease operations. However, if your business is profitable but the economy is poor, you should stay in business until the economic climate improves.
- The worth of your assets vs. your liabilities: If you have more liabilities than assets, it might be a good idea to close. However, if you have a surplus of assets, you may be able to save your business.
- Your personal liability for business debt: If you are personally responsible for your company’s debts, it might make sense to keep your business open (without accruing additional debt) while you’re negotiating with your creditors. Closing up shop may leave your creditors with no choice but to ask for a seizure of your personal assets.
What Kind of Bankruptcy Should I Choose?
The answer to this question depends on your organization and its assets. If you’re staying open, Chapter 7 is a viable option for sole proprietors. It can discharge business and personal debt, and allows you to exempt your business assets. However, if some of your assets are non-exempt, your trustee will dispose of them to satisfy your creditors.
Chapter 13 is for individuals only. If you’re running a partnership, LLC or corporation, you cannot choose this type of bankruptcy. You can eliminate all your debts just as with a Chapter 7 filing, and it may be a good choice if your proprietorship has substantial non-exempt assets, because it allows you to reorganize debt and set up a payment plan while operations continue.
Chapter 11 is for corporations, LLCs and partnerships who want to continue business while reorganizing debt. It’s similar to Chapter 13, because you’ll keep most of your assets while gradually repaying creditors. The Lake Law Office PLLC can advise you as to the best course of action.
