If I Have a Small Business, Should I File Bankruptcy in Atlanta, Georgia?
If you have a small business and can no longer repay creditors, it could be beneficial to file bankruptcy in Atlanta, Georgia in order to either repay business creditors that you owe or avoid paying business debts altogether. For a small business owner, it is often difficult to distinguish where one’s business life stops and one’s personal finances begin. Bankruptcy of a small business can often mean that the individual who owns the business should also declare bankruptcy.
Therefore, business owners facing financial difficulty must decide whether it is more effective to file business bankruptcy or personal bankruptcy and whether to file Chapter 7 bankruptcy or Chapter 11 bankruptcy in Georgia.
Chapter 7 bankruptcy is an effective bankruptcy tool for a person who owns a small business when the owner’s financial interests are intertwined with the business. Most small business owners are required to personally guarantee business loans, so filing bankruptcy for the business alone will not relieve the individual owner of his/her obligation to pay the debt. In situations where the business is failing or has already failed to earn income, it may be a better choice for the owner to close the business and file Chapter 7 individually to wipe out his or her personally liability on the business debt.
If the business is looking to restructure and continue with its business activities, Chapter 11 bankruptcy may help accomplish this objective. Chapter 11 bankruptcy allows business owners to pay off business debts over an extended period of time by restructuring the business and repaying debts using the revenue generated by the business.
A qualified bankruptcy attorney can work with you to determine what works best in your circumstances. If you are a small business owner and are considering filing bankruptcy in Atlanta, Georgia, contact the Law Offices of Charles Clapp at 404.585.0040 to schedule a free initial consultation.