Only sole proprietors who file for bankruptcy will receive a discharge of their debts. If your small family business is a different type, it will not receive a discharge of debts. If you signed a personal guarantee or are otherwise responsible for the business debt, you are still under a legal obligation to pay the debt unless you decide to file a personal Chapter 7 bankruptcy.
In a business Chapter 7, exemptions do not apply. Instead, the trustee sells every business asset and uses the proceeds to pay creditors, and the company goes out of business. Many business owners choose to sell their own business assets since they generally will receive more money for them than a bankruptcy trustee. This allows them to pay more of their business debts, ensuring they will pay less of the business debt with their personal funds.
Another drawback is that by filing for Chapter 7 bankruptcy, can give creditors the opportunity to object to the bankruptcy filing or to assert that corporate formalities were not adhered to. Furthermore, they can request that the members or shareholders of the business should pay the business debt with their assets.
It is imperative that you weigh the pros and cons of filing Chapter 7 to help your business carefully. Seek the advice and expertise of a California small business bankruptcy attorney who can assess the specifics of your situation and help you determine the best path for you.
Contact a California Small Business Bankruptcy Lawyer Today
If it’s unlikely that the financial situation of your small family business will substantially improve soon on its own, the best thing you can do is to reach out to an experienced California small business bankruptcy attorney today. Your attorney will assess the financial status of your business and help determine the steps that will result in the most favorable outcome to your case. By taking this step, you are taking control of your situation and moving towards financial security.
Your California small business bankruptcy lawyer can explain more about your bankruptcy options, as well as their benefits and drawbacks in your individual personal or business situation.
Schedule your family business bankruptcy consultation by emailing This email address is being protected from spambots. You need JavaScript enabled to view it. or calling (408) 909-0125 today. We want to help you achieve a brighter financial future and find success in whatever you might aspire to do.