Bankruptcy Basics for Small Business Owners in Tulsa Oklahoma
Starting a business takes incredible courage and a lot of hard work. Keeping a business going takes even more hard work, dedication, and also
Which Business Bankruptcy do I File
Most small business owners will be able to choose between three bankruptcy filing options. The first option is for business owners who wish to close up shop. Sole proprietors, partners in general partnerships, and even some corporations and LLC’s can file for bankruptcy under Chapter 7. Chapter 7 bankruptcies are liquidation bankruptcies, where non-exempt assets are sold in order to pay creditors, and eligible debts are discharged.
Small business owners who wish to stay in business may be able to choose between filing for bankruptcy under Chapter 11 and filing for bankruptcy under Chapter 13. Chapter 11 bankruptcy is an option for sole proprietorships, corporations, LLCs, partnerships, and other business entities. In a Chapter 11 bankruptcy, the business owner creates a plan for reorganizing their finances and proposes it to the bankruptcy court. Depending upon what is most important for your business, your proposed plan could include things like selling off assets and equipment that you do not need, keeping equipment and assets that your business needs for its continued operation, discharging debts, and renegotiating the terms of secured debts on items that you want to keep. Once your plan is approved, you will spend the next few years conducting your business according to its terms. If you abide by the terms of your reorganization plan for the specified time period, debts that you proposed to discharge will be discharged.
If you are a sole proprietor, you may be able to file for bankruptcy under Chapter 13, the individual reorganization chapter, by filing a bankruptcy petition on your own behalf. The reorganization plan that you propose to the court in a Chapter 13 bankruptcy could include some of the same things as a Chapter 11 bankruptcy, such as keeping necessary business equipment, selling unneeded assets and equipment, renegotiating debts, and discharging other debts. Chapter 13 bankruptcies cost less than Chapter 11 bankruptcies, and they take less time. However, Chapter 13 bankruptcies are not as flexible as Chapter 11 bankruptcies, and there are debt limits which could affect your eligibility to file under Chapter 13.
After you have educated yourself about the bankruptcy options that are available to small business owners, it is time to do the more difficult work of deciding whether it is time to file for bankruptcy. A good way to begin this process is to spend some time thinking about your business, and about what direction you would like to go with it. Then, write down your personal and business goals. With those goals in mind, take a look at your current financial situation. You can do that by making a list of your business assets and their current values, and a list of your business creditors and the amount of debt that you owe to each one. Most importantly, take your time. A small business bankruptcy can be very helpful to a struggling business owner, if it is undertaken after careful thought and contemplation.
Free Bankruptcy Information
If you find that you have questions while you are thinking through whether to file for a small business bankruptcy, a knowledgeable Oklahoma Bankruptcy Attorney can help. We offer a free initial consultation where we can answer your questions, evaluate your needs and explain your options. Please contact us at South Tulsa Bankruptcy Lawyers or fill out our online form today!
Small Business Bankruptcy Tulsa Ok
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