Operating a small business is not for the faint of heart. As many small business owners know, there are dozens of unforeseen issues that usually arise that can cause crisis for any business. Among the most common issues for a small business owner having too much debt and not enough cash flow are at the top of the list. While business entities such as partnerships, LLCs, and corporations can’t utilize Chapter 13 bankruptcy, for small business owners who are a sole proprietorship, this form of debt relief has the power to wipe out your personal and business debts.
Commonly referred to as repayment bankruptcy, Chapter 13 bankruptcy allows you to keep your assets and repay your creditors off over a three to five year period. As a sole proprietor you can also protect your business assets while continuing to run your business and reorganize your debts. If you decide with your Auburn bankruptcy lawyer that Chapter 13 bankruptcy is the best for you and your business, you’ll need to provide information about your personal income and expense in addition to your business income, business debts, and business assets. At a minimum, your bankruptcy trustee will request tax returns and a profit and loss statement from your business.
While you may not have to provide much more than the above mentioned documents, you should also be prepared to provide bank statements, receipt books, payroll records, invoices, cancelled checks, and other pertinent bank records that can back up the figures from your profit and loss figures.
Chapter 13 bankruptcy for small business owners works in much the same manner as it would for an individual who was an employee of a company. By filing Chapter 13 bankruptcy you’ll be gaining the ability to wipe out business debts through discharge, pay of your priority creditors, cram down secured loans, and keep your assets. If your small business has experienced financial issues that threaten the stability of the company, don’t hesitate to contact a Sacramento bankruptcy attorney to find out the best way to deal with the debt while keeping your property and assets.
Categorized in: Chapter 13