Law Office of Ginger C. Cord, PSC. - Bankruptcy
Free Initial Consultation

Local 859-963-2073

Toll Free 800-762-6916

Call Today

Pursue A Bright Financial Future
Freedom From Debt Is On The Horizon

Business owners and bankruptcy

Business owners in Kentucky may be able to keep their businesses after filing for bankruptcy in some cases. For instance, the owner of a sole proprietorship may personally file for bankruptcy while still maintaining their business. The owner of a larger company who would like to keep their business has the option of filing for Chapter 11 bankruptcy.

If a sole proprietor would like to keep their business after filing for bankruptcy, they can choose to file for Chapter 7 or Chapter 13 personal bankruptcy. Chapter 7 bankruptcy is designed for people or businesses that are unable to repay debt, while Chapter 13 bankruptcy is reserved for individuals who would like to set up a debt repayment plan. The owner of a larger company does not have the option of filing for Chapter 7 bankruptcy without liquidating their company's assets and closing the business.

Individuals or companies that file for Chapter 7 bankruptcy are protected from collection attempts by creditors. After a bankruptcy petition has been filed, the U.S. Trustee appoints a bankruptcy trustee for the case. The trustee decides what property will be liquidated to repay debts and what property a business owner will be allowed to keep. A sole proprietor who files for bankruptcy may be allowed to keep all of the property that they use for regular business operations.

A business owner who is considering filing for bankruptcy might want to talk with a lawyer about what form of bankruptcy would best suit their needs. In some cases, liquidating assets and closing a business can be the best option for financial recovery. However, there are some cases where holding onto a company through a bankruptcy filing is a smarter long-term strategy.

Source: Houston Chronicle, "Can I Keep My Business If I File for Chapter 7 Bankruptcy?," August Jackson, Accessed Feb. 12, 2015

No Comments

Leave a comment
Comment Information