Are you considering petitioning for chapter 7 bankruptcy, but, stressed over what will happen to your business? Will your means of living be secured? here’s what you want to be aware of:
When you are a sole proprietor, your business and you will be treated as one. You can release the relevant debt (individual and business) through a Chapter 7 Bankruptcy in your name.
the bankruptcy exemptions enable protection for your personal and business assets. the amount will depend on the state you reside in because it varies from state to state. so, it is better if you speak with your legal counsel about all your personal and your business assets prior to filing.
However, assuming that your business uses exorbitant items like equipment or products and supplies, keeping the company afloat subsequent to filing might be troublesome. The Trustee might have to auction non-exempt property, making it hard to maintain your business.
Can The Trustee Shut Down A Sole Proprietorship?
It relies upon the circumstance. And, while it is possible that a trustee can close down a sole proprietor business given the right conditions if you need to keep operating your sole-proprietorship business, it is most certainly possible so please examine the potential outcomes with your legal counsel.
The trustee may likewise consider liability issues while choosing whether or not to close down the sole proprietorship. So, you should have liability insurance for your business. In case of a lawsuit, the legal administrator (trustee) is viewed as a nominal proprietor and can be named as a defendant in the lawsuit. Assuming the claim is fruitful, the subsequent judgment will be an additional expense with priority ahead of the prepetition creditors.
But What If You Want to Continue Your Business?
Assuming you wish to keep operating your business and seek financial protection, talk with your legal counsel about consolidating your business prior to filing. You can also file under chapter 13. Under Chapter 13, you can keep running your business and get a discharge of your debts after your arrangement is finished.
Need More Information?
If you want good legal counsel and if you live near Los Angeles or Dallas, TX, reach out to the Recovery Law Group. Let us go over all of the different options that will work best for your unique situation.
Call us (888-297-6203) or go to https://recoverylawgroup.com/bankruptcy/