What chapter of bankruptcy should I file for if I own a business? How? 10 Answers as of May 19, 2015

I own a small photography studio that I started with my own money and some loans from the bank. I do not have any other employees besides a few members of my immediate family who do not have any other source of income. My business is sinking and I am currently $300,500 in debt, due to rent and equipment for my business and personal medical expenses. I want to do some research before I consider applying for bankruptcy, but I am not sure if I should apply for Chapter 7 or 13.

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Gleissner Law Firm, LLC | Luke Gleissner
Deciding what chapter to file is a complex question and you should really consult with an attorney concerning the different chapters. Most attorneys will give the first consultation free. Chapter 7 is usually for a liquidation. Your assets, with the exception of your homestead exemptions, are sold with the proceeds used to pay your creditors. Chapter 13 and 11 are reorganizations where you commit a certain amount of your future income to make monthly payments to your creditors over a future period of time. In chapter 13, the usual period of time is 60 months. But, you really need to speak to an attorney to discuss which option may be better for you.
Answer Applies to: South Carolina
Replied: 5/19/2015
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
It depends on a lot of factors. I would pay an experienced BK lawyer for a one hour meeting to get all of your questions answered. Now is not the time to skimp. You need to know exactly what's in store for you and the business.
Answer Applies to: Colorado
Replied: 5/19/2015
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
You need to see a lawyer. Don't wait. You may find one at nacba.org.
Answer Applies to: California
Replied: 5/18/2015
A Fresh Start
A Fresh Start | Dorothy G Bunce
Being in a small business has nothing to do with making the decision to file Chapter 7 versus Chapter 13. I look at two criteria to make this decision, 1) how much money is left from your earnings after you pay just necessary living expenses and 2) what are your goals in bankruptcy? For example, do you need to rescue a home from foreclosure, pay off trust taxes or other large tax debt?
Answer Applies to: Nevada
Replied: 5/18/2015
Ronald K. Nims LLC | Ronald K. Nims
There are income limits on chapter 7 based on the cost of living in your state. So if your household income is above the limit, chapter 13 is your only option. Even if you qualify for a chapter 7, you might want to file a chapter 13 if you're trying to protect your house from foreclosure. The big difference between a 7 and a 13 is that with a 7 your debts are discharged and generally you won't make any payments. In a 13, you'll make payments for 3 to 5 years.
Answer Applies to: Ohio
Replied: 5/18/2015
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    Whether you own a business or not is typically not so relevant as to the question of what type of bankruptcy is available and will yield the best result. Other considerations, your income, your assets (which of course includes any assets of the business which you own), whether debts of the business have been personally guaranteed and much more goes into answering that question. Your best course of action is to actually sit down with an attorney and go over: income, assets, debts, living expenses. Only after that information is provided can the attorney advise you on the best course of action. You could do a ton of research beforehand, if you are inclined and are able and willing to put in the time. As a solo practitioner, hence also a business owner, money and time, time is money, can be in short supply. A competent experienced attorney can save you time, stress, and sometimes big bucks if you attempt to do something on your own but end up making mistakes. The attorney will distill the vast amount of information to what is relevant to you. In a complicated case, it's not uncommon for the potential client to go home after a consultation, do some thinking, and come back with additional questions. I think this would save you a lot of time and
    Answer Applies to: California
    Replied: 5/18/2015
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    The answer will depend upon what your annual income is, what assets your business owns, what form of entity (if any) your business is, whether you hope to continue with your business or shut it down, and a number of other factually specific considerations. You really should sit down with a bankruptcy lawyer and seek guidance.
    Answer Applies to: Colorado
    Replied: 5/18/2015
    Wink & Wink
    Wink & Wink | Gigi Wink
    The answer here is complicated and requires an in depth analysis of your business/personal assets and debts. A free consultation with a bankruptcy attorney with experience in small business bankruptcy issues is essential. This is a complicated area of bankruptcy law and you need expert advice.
    Answer Applies to: Colorado
    Replied: 5/15/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    A consultation with a skilled bankruptcy lawyer should answer your question. You might want to file a Ch. 7, but your earnings vs. expenses might possibly lead to the court's telling you that if you want the benefits of bankruptcy, you have to do a Ch. 13. If your business is not a separate entity (like an LLC or a corporation), then its assets and debts are simply part of your own overall financial picture. Only an individual can file under Ch. 13, not a business, in any case. A good BR lawyer can ask the right questions and advise you along the best path. Good Luck.
    Answer Applies to: Wisconsin
    Replied: 5/15/2015
    Law Offices of Daniel J Winter
    Law Offices of Daniel J Winter | Daniel J Winter
    This is a question that can only be answered after having an in-depth meeting with a bankruptcy attorney. You will need to get together your business and personal tax returns for 2011-14, a list of your debts from both the business and personal, and copies of your bank loans. Also, you'll need a list of your business assets and liabilities, and your personal assets, and debts. Then, the attorney can consult with you about all your options, and discuss what to do next.
    Answer Applies to: Illinois
    Replied: 5/15/2015
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