When you own a business and things haven’t been going well, it can be disheartening. After all, you’ve likely poured hundreds of hours into doing everything possible to help your company succeed, and when the bills keep piling up, you may not know where to turn. As such, filing for bankruptcy may be in your best interest. If you’re considering filing for business bankruptcy, you may also wonder whether or not you can include personal debts in this process. The following blog explores what you must know about this process and how a Memphis, TN business bankruptcy lawyer can help you during these challenging times.
What Is Business Bankruptcy?
Like personal bankruptcy, when a business has debts they cannot pay off, they may file for bankruptcy. However, there are more factors that must be considered when determining the best bankruptcy option for your needs. For example, you’ll need to consider the amount of debt your company owes, whether or not your business’s income can make payments, and how the company is structured.
Can I Combine My Business and Personal Debts When Filing?
Generally, the only time you can include personal debts in your bankruptcy case is when you are a sole proprietorship. If this is the case, you can file for Chapter 13, which is only for individuals. Because you run a sole proprietorship, you and your company are considered one and the same, so the business’s debts are reflected on you and vice versa. As such, you can include your own personal debts on your Chapter 13 filing if you run a sole proprietorship. Essentially, filing Chapter 13 bankruptcy can help with all debts, regardless of which entity you are filing for, because you and your business are one in the eyes of the law.
If you run any other kind of company, you may not be able to include your personal debts when filing for business bankruptcy, or your business debts when filing for personal bankruptcy. This is because you are considered separate entities under the law.
How Can an Attorney Assist Me During This Process?
As you can see, there are many factors that will influence the outcome of your case, making this process complex. That’s why it’s in your best interest to connect with an experienced attorney to discuss your options. Your attorney will work with you to explore all your choices to help you make the most informed decision for your unique circumstances.
At the Arnold Law Firm, we understand how harrowing being in debt can be, especially when your business is on the line. That’s why our dedicated team will listen to your situation to determine the best course of action for your company. Contact us today to learn how we can work with you during these challenging times.