Many small businesses in New Baltimore have a difficult time getting off the ground. In fact, Forbes reports that 8 out of every 10 businesses nationwide end up failing within the first 18 months.
When a business fails, this can have serious financial consequences. Many people who start their own business do so as a sole proprietorship, which means that your company is considered the same legal “person” as you. There is no separate identity for your business, nor are there separate debts. If your business has financial trouble, you personally face financial difficulty.
Bankruptcy in New Baltimore
When you go into business, there is a good chance you will end up having to take on personal debt in order to get started. The Michigan Credit League reported on one survey in which 90 percent of small businesses indicated that availability of credit is a problem and that it is harder to get loans today than it was in the past.
A new business, especially a sole proprietorship, is not going to be able to get credit based on its own promise to repay. If you want to borrow money, you will end up doing it on your own credit cards or at the very least co-signing for the business cards. If you take a loan for the company, you are going to have to make a personal guarantee.
If it turns out that your New Baltimore business is one of the many that fail, the company may not be able to pay back all the debts it borrowed. Unless you personally have the funds to repay all the debt, you may have no choice but to file bankruptcy which may be just the thing your business needs to get back up and running.
How a New Baltimore Bankruptcy Attorney Can Help
If your business is a sole proprietorship, you will have to file personal bankruptcy to discharge business debts. This is true even if you were operating under a “Doing Business As (DBA)” status under a name different from your own.
A bankruptcy attorney for New Baltimore can help you to understand the impact of bankruptcy on your personal and family finances. Your attorney can help you understand what courses of action may be open to you for permanently discharging the business debt.
There are different types of personal bankruptcies you could file to get rid of your company’s debts, including Chapter 7 and Chapter 13.
Chapter 7 bankruptcy will allow you to discharge the debt quickly with no repayment process, but may force the sale of some non-exempt assets. This could include some of the assets the business owns. Chapter 7 is typically a liquidation bankruptcy and your company will likely close its doors for good. Chapter 13 works differently from Chapter 7, as you have to create a repayment plan but no assets are seized and sold.
A New Baltimore bankruptcy lawyer will advise you on whether these or other chapters of bankruptcy are a good option and can provide you with representation throughout the process of discharging your debts. Call the bankruptcy law office of Jeffrey J. Randa today and a staff member will always be available to answer your questions and provide you will all of your options for relief.