If you own a small business and need help reorganizing your debts,
Chapter 13 bankruptcy may be an option to consider. This Chapter can help you develop a repayment
structure based on income earnings, type of debt, and expenses you have,
and ultimately keep your assets and business in operation.
Chapter 13 plans typically last from three to five years, depending on
the circumstances involved, and will require monthly payments toward debt.
There are a few factors to consider in helping you understand how the
process works and whether you meet qualifications. Our team at Allmand
Law Firm, PLLC is readily available to discuss your unique situation and
options in detail during a FREE financial empowerment session.
What to Consider When Evaluating Chapter 13 for a Small Business
Small businesses considered a
sole proprietorship and not a separate legal entity are most likely to qualify for Chapter
13, as it is reserved for individuals. Unfortunately, businesses that
are a legal separate entity (corporations, partnerships, LLCs, etc.) typically
do not qualify. There are a few workarounds to this:
- Business owners of certain partnerships not considered separate entities
may have the option to file Chapter 13 bankruptcy and use the same reorganization
it provides for the benefit of the business.
- Business owners of companies that are separate legal entities may be able
to file Chapter 13 bankruptcy and, if they are personally liable for certain
debt, can include those business debts in the Chapter 13 repayment plan
Understanding the Benefits
Should a small business qualify for Chapter 13, it can provide benefits
in several ways. For example:
- Any business debt considered an unsecured non-priority may be eliminated
or discharged once a repayment plan has been completed. In many cases,
business debts are not distinguished from personal debts, but if your
debt is in relation to being a cosigner (such as a credit card or loan)
for the business in question, the creditor may look to business assets
to satisfy what is owed.
- Chapter 13 can allow small businesses to reduce, or cram down, secure loan
payments on property such as a vehicle or business equipment and incorporate
those payments in the court-approved repayment plan.
- Small businesses or owners who may be liable for priority debts such as
taxes can include them in their Chapter 13 repayment plans.
As opposed to Chapter 7 bankruptcy,
Chapter 13 plans are designed to allow businesses to stay in operation while a business owner keeps their non-exempt assets, reorganizes, and
pays monthly payments toward their plan.
Facing Financial Problems with Your Small Business? Call Allmand Law Firm, PLLC
Small business owners are the backbone of this country, and our firm is
committed to helping business owners find the right solution to their
unique problems with debt. If you would like more information about
bankruptcy how our team can help you,
contact a Dallas bankruptcy lawyer from our team today for a FREE financial empowerment session!