Do I Need To File Bankruptcy If My Small Business Fails

Do I Need To File Bankruptcy If My Small Business Fails? Call (703) 967-3315 or visit https://fishersandlerlaw.com​​​ and ask us about our $0 Down Bankruptcy Program today.

Fisher-Sandler has been helping people get out of debt since 1999. We’ve helped thousands of clients file for bankruptcy and we can help you too! Our experienced attorneys have successfully handled thousands of chapter 7 and chapter 13 cases in Northern Virginia.

If you are tired of being harassed by creditors, or if your financial situation is causing stress on your family, then it may be time to consider filing bankruptcy under the U.S. Bankruptcy Code. You can stop harassing calls from creditors today! Get a fresh start with zero down payment for chapter 7 bankruptcy filing at Fisher-Sandler!

If you're a struggling small business owner—especially a sole proprietor—filing for Chapter 7 bankruptcy could help you save your service-related business or provide a simple way to close it. It's rare to put any other type of business in a Chapter 7 bankruptcy—such as a partnership, LLC, or corporation—because it's usually not beneficial. The business won't receive a debt discharge, and filing for bankruptcy can increase other liabilities, such as a lawsuit to pierce the corporate veil.

A sole proprietor typically uses Chapter 7 after a business closure (but not always—more below). The benefit to the filer can be substantial because Chapter 7 will discharge (erase) both qualifying business and personal debts, thereby genuinely giving the debtor a fresh start. Unlike a Chapter 11 or 13 filing, Chapter 7 doesn’t require creditor repayment. And it's fast, taking three to four months to complete.

The downside is that all business and personal property become part of the bankruptcy estate. But you won’t lose everything. Bankruptcy law allows you to keep “exempt” assets in Chapter 7, such as some equity in a home and car, household goods, a retirement account, clothing, and a small amount of the equipment needed in your profession. The Chapter 7 bankruptcy trustee sells assets that aren’t protected by an exemption and distributes the proceeds to creditors.