Small businesses run America. The US Small Business Administration reported that in 2017 there were 29.6 million small businesses in operation, consisting of 57.9 million employees. Out of all the business in the United States, that’s 99.9% of them. Unfortunately, only about 50% of business make it to their fifth year anniversary. Businesses fail for a number of reasons, but the consensus is that it takes hard work and steady revenue to keep a small business afloat. If you are a small business owner and are struggling with debt, you can use Chapter 13 bankruptcy to save your business by allowing you to reorganize your debt.
How Chapter 13 Bankruptcy Affects Small Business
Companies that are structured as a limited liability company (LLC) or corporation can’t actually file Chapter 13 bankruptcy since it is reserved for individuals. However, because sole proprietorships and certain partnerships are considered to be the same legal entity as their owners, you can file Chapter 13 bankruptcy to provide similar benefits to your company. With sole proprietorships and some partnerships, you, the owner, must personally guarantee loans for the business and therefore can have that debt discharged in bankruptcy.
Benefits of Filing Chapter 13 for Small Business Owners
There are several benefits to filing chapter 13 bankruptcy for small business owners which include, wiping out business debt, paying off priority creditors, cramming down securing loans and keeping business assets. The only business debts that can’t be discharged using a Chapter 13 bankruptcy are those that are cosigned or guaranteed by the business itself and not by you the owner.
Chapter 13 Bankruptcy for Business
As a small business owner there is a lot to worry about, but paying back taxes and creditors shouldn’t be one of them. An experienced bankruptcy attorney has the ability to assess your business debt, and guide you towards forming a repayment plan that can reduce the balance of secured debts and allow you to keep nonexempt assets while your reorganize your debt load. Contact a Houston bankruptcy lawyer today to find out how Chapter 13 bankruptcy can give you debt relief while keeping your business up and running.