For small business owners facing bankruptcy, the unknowns can cause a gut wrenching amount of stress. They wonder what is going to happen to the business they’ve worked hard to build, not to mention their livelihood, after they declare bankruptcy. As a small business owner myself, I certainly understand how much of your heart and soul goes into building and running a small business.
Whether you continue to operate your business after bankruptcy depends on the type of business and what chapter of bankruptcy you file. The best solution depends on a variety of factors, including the formation, type of business, financial viability, goal of the owners, types of debts, and personal guarantees by owners. Small businesses face a set of considerations that must be weighed carefully before filing for bankruptcy. In general, corporations, LLCs and partnerships can continue to operate with proper advance planning and strategy.
There are exceptions, however, sole proprietorships and failing corporations present their own set of challenges.
The short answer is that continued operation of a small business before, during and after a bankruptcy filing is a complicated dance and expert legal assistance can make the journey much less stressful and more likely to succeed.
If you or your business is dealing with unmanageable debt, bankruptcy might be a viable solution to getting rid of debt and saving your business. In order to fully understand the advantages and disadvantages of each chapter of bankruptcy, you should discuss small business bankruptcy with a board certified Montana bankruptcy lawyer.
Contact Cossitt Law at (406) 752-5616, we can take a look at your situation and provide legal guidance based on over three decades of small business bankruptcy experience so you can make an informed decision.