Small business owners in Ohio who are experiencing overwhelming debt may be surprised to learn the extent of the protection that can be obtained by filing for bankruptcy. Bankruptcy often provides a business owner with the opportunity to overcome excessive business debt. An attorney can explain the protections afforded under the federal Bankruptcy Code.
With careful planning and professional guidance, a business bankruptcy can provide a solution for nagging debt problems. Personal and business bankruptcy will protect a small business owner from creditor harassment. Depending on the type of bankruptcy filed, debts may be discharged, reduced or delayed, which may be just what is needed to get the business back on track.
Sole owners, partnerships and corporations often file for Chapter 11 bankruptcy, which allows business operations to continue while debts are reorganized pursuant to a plan approved by the court. Chapter 13 is a similar option but involves the personal debt of the owner, which can be repaid -- under the supervision of a court-appointed trustee -- over three to five years, according to a court-approved repayment plan. These two options do not necessarily involve the liquidation of any assets.
Sole owners of small businesses whose debt has simply become unmanageable may file for Chapter 7 bankruptcy after which business operations will cease and assets will be liquidated to cover business debt. A sole owner or general partner who might be held responsible for business debts may gain protection from losing personal assets by filing for Chapter 7 business bankruptcy. Under any circumstances, it makes sense to consult with an experienced Ohio bankruptcy attorney to ensure informed decisions are made.
Source: allbusiness.com, "When Filing for Small Business Bankruptcy Makes Sense", Meredith Wood, Accessed on April 10, 2016