Business owners are often concerned about what happens to their business when they file bankruptcy. In most cases, this is largely dependent upon whether the debts are business debts or personal debts as well as the ownership structure of the company. Typical ownership schemes that GA business owners use include:
- Sole proprietorship – all assets of your business must be disclosed and may be sold by the Trustee if you are filing Chapter 7.
- Partnership – the value of your portion of the business must be disclosed during your bankruptcy filing.
- Limited Liability Partnership – your portion of ownership is to be considered an asset when filing bankruptcy.
Talk to your Kennesaw Bankruptcy Attorney
Whenever you are filing bankruptcy, it is imperative that you have an open discussion with your Kennesaw bankruptcy lawyer. Some of the information that you may need to work out include:
- Bankruptcy paperwork – your business is considered a personal asset and while it may only have limited value, it must be disclosed on your asset schedule.
- Value of business – some businesses are valued based on the efforts of their owners such as writers, web designers and others. Other businesses have a true market value such as a convenience store. Your Kennesaw bankruptcy attorney can help you determine how your business should be valued.
- Business assets and inventory – while the GA bankruptcy exemptions include “tools of the trade” there is a chance your business assets including computers, printers, copy machines, etc. may exceed the exemption. All assets must be valued at fair market value.
- Whether debts personal or business – if some or all of the debts you are seeking to eliminate in bankruptcy are business debts, make sure you discuss this with your Chapter 7 bankruptcy attorney. In some cases, you may benefit more by filing Chapter 13 to protect your property, pay down priority debts and have others eliminated at discharge.
Business Owners Face Unique Challenges
When you are considering filing personal bankruptcy and you are a part owner or full owner of a business, there are some unique challenges you will face. Since the assets of your business as well as your ownership portion will help determine your net worth, it is imperative that you understand the potential ramifications of filing bankruptcy. It is also important to understand that even if you have a thriving business, does not mean that it has a strong market value; your Kennesaw bankruptcy attorney can help you determine what problems you may face as well as help you decide what assets can be protected in bankruptcy.
Business owners may still have overwhelming personal debt, even if their business is thriving. If you are facing a mountain of debt and cannot see any way to get out from under that debt, contact Roger Ghai, a bankruptcy attorney in Kennesaw at the Law Offices of Roger Ghai at (770) 792-1000; I can help answer your questions and help you determine the best course of action based on your individual circumstances.