The most frustrating part of owning a business is that it might fail without even be your fault. Your company might be under-financed, there might be too much competition in your market or geographic area, or the economy might turn sour.
For those and many other reasons, you might have to consider declaring bankruptcy just to stop the harassing phone calls and temporarily hold off the mounting bills.
The first step in that direction — even before you’ve made the final decision as to whether or not you’ll file — should be to consult an experienced Las Vegas bankruptcy attorney.
In the meantime, here’s a brief summary of the basics of business bankruptcy.
THREE OPTIONS FOR DECLARING BANKRUPTCY AS A VEGAS BUSINESS
Depending on the way your business is structured, you might have as many as three bankruptcy options to consider. Each has its own advantages and disadvantages, which should be more fully explored with your attorney.
Chapter 7 — You can only use this option if you’re a sole proprietor. It’s not available if you have a corporation or are in a partnership. Only use this option if you wish to dissolve the company and get out of the business. All but exempt property will be distributed to help pay your debts. Exempt property can include your home, car, pensions and insurance, and other personal goods to a certain dollar value.
Chapter 11 — This is the best option if you want debt relief, but to continue operating your company. It’s available to sole proprietors, corporations, and partnerships and involves a bankruptcy court restructuring your business debt so that you can make regular payments while remaining in operation.
Chapter 13 — This form of bankruptcy also involves the restructuring of your debts and adhering to a repayment plan, but it’s only available to businesses structured as sole proprietorships. And it can only be used if your business doesn’t exceed various financial parameters. It must have unsecured debt of less than $336,900 and secured debt not to exceed $1,010,650. These are the current limits, but they’ll rise over time.
Keep in mind that not all debt will be wiped out by any form of bankruptcy. You’ll still be responsible for tax debt and maintaining such payments as alimony, child support, college loans and loans on your home and car, among others.
Also, regardless of the form of business bankruptcy you file, you’ll have to take and pass an accredited credit counseling program.
Las Vegas bankruptcy law is a complex issue for business owners of all sizes. That’s why you need to immediately consult with a lawyer with experience in this area. For assistance with all related issues contact Vohwinkel & Associates, an experienced Las Vegas bankruptcy attorney. We invite your phone call to 702-838-7522.