Options for business owners in financial distress

On Behalf of | Sep 26, 2019 | Chapter 7 |

As this blog has discussed, families and individuals in Florida may suddenly find themselves overwhelmed by debt for a number of different reasons. For instance, a job loss or a medical emergency can mean that a family who was staying afloat suddenly needs financial help.

However, the Chapter 7 process is not just for those who have consumer debt. South Florida is also the home to many businesspeople who choose to go into business for themselves as a sole proprietorship. In other cases, they may elect to a corporation or an LLC. However, their creditors will still likely expect them to sign personal guarantees on their loans, making them personally responsible for corporate debt.

Unfortunately, despite the best efforts of their owners, many businesses in the Miami area fail every year. The end result is that the business has to shut its doors and sell off its assets. Even once this process is over, creditors still may have unpaid balances, and they may elect to go after the owner’s assets, including their wages, their home, their vehicles and their bank accounts.

In this situation, an owner may have to consider bankruptcy as an option. Our law office can help a business owner decide whether it is necessary to take the huge step of filing for bankruptcy in order to protect his or her personal assets.

Assuming a filing is in the best interest of the person, we can also make sure that the necessary paperwork is properly prepared and that our client does appropriate financial planning for the aftermath of the bankruptcy.

Starting a business is a huge risk, and the reality is that a new business frequently will not turn out the way one had hoped. In these situations, it’s good to know that bankruptcy is an available legal option for the owners who would otherwise be on the hook for the business’s debt.