How Bankruptcy can affect your Business

 

 

 

 

You will often hear a lot about personal bankruptcy and how it can affect your home and family, but what if you are an owner of a small business? The bankruptcy attorneys at Robinson, Seiler & Anderson in Provo can help you with all over your bankruptcies needs as a business owner. Below are just some of the things that could happen when you file for bankruptcy and the different types of bankruptcy to consider filing with a small business.

 

Filing Chapter 7 Bankruptcy

This type of bankruptcy is referred to as liquidation. Chapter 7 bankruptcy filing is suitable for a business that does not plan on staying open. This is because this type of filing does not include any type of repayment plan. This is the suitable choice for sole proprietors and small businesses. However, the bankruptcy code allows for the debtors to keep some “exempt property.” But with this type of filing, it is expected that there will be some sort of loss of property. Consulting with your attorney at Robinson, Seiler & Anderson in Provo before filing for a Chapter 7 bankruptcy is always recommended.

 

Filing Chapter 11 Bankruptcy

This type of bankruptcy allows your business to recover. So Chapter 11 is referred to as repayment and sometimes reorganization. The filing of a Chapter 11 bankruptcy is suitable for corporations and limited liability companies although some sole proprietorships have chosen to file Chapter 11. Because it allows an organization to recover and restructuring is included, Chapter 11 does involve additional scrutiny by the bankruptcy courts. Small businesses that file for Chapter 11 bankruptcy are treated differently than regular bankruptcy cases and are called a “small business case.” A small business case is referred to by the bankruptcy code as a case with a “small debtor.”

 

The Impact of Filing for Bankruptcy

In the case of a sole proprietor, if you as the business owner choose to file for Chapter 7 bankruptcy, the business automatically files, as well. This is the case because you are a sole proprietor. There is nothing that separates you, the owner, from the business. Because there is no separation when a sole proprietor files for bankruptcy, their personal credit standing is a risk. Chapter 11 bankruptcy is considered to be the choice for businesses with a large amount of assets. Although Chapter 11 bankruptcy affords your business the chance for reorganization and restructuring, it often is a complicated and costly process. You will need to retain an accountant and a bankruptcy attorney from Robinson, Seiler & Anderson in Provo to assist you with these matters although the bankruptcy code makes it possible for small businesses to file.

View Our Testimonials Announcement

Norman H. Jackson, Utah Court of Appeals Judge, Retired, has joined the law firm of Robinson, Seiler & Anderson, LC, effective April 2017.  Judge Jackson was one of the seven founding Judges of the Utah Court of Appeals and served terms as Presiding and Associate Presiding Judge.
 
Judge Jackson was the senior attorney in a Richfield law firm for eighteen years.  The firm engaged in legal, business and tax cases, including practice before State and Federal Courts, U.S. Board of Land Appeals, Utah Public Service Commission and Arizona Corporation Commission.  Clients included counties, cities, banks department stores, communications and credit associations, irrigation companies, auto dealers, building supply stores, farmers, ranchers and small businesses. They took “every type of case that came through the door,” from criminal defense work to a patent royalty dispute for the inventor of the Frisbee. Judge Jackson has been a lifetime rancher doing business in Utah as Jackson Cattle Company and Arizona as EJ Cattle Ranches.
 
Judge Jackson’s professional service includes terms on the Utah State Bar Commission, Bar Foundation (President and Vice President), Air Travel Commission, and Utah Information Technology Commission.  He served on the Judiciary’s Alternate Dispute Resolution Committee for thirteen years and initiated and supervised the Appellate Court Mediation Office.  He developed and advanced a realistic and workable framework for both of Utah’s Appellate Courts to use in reviewing trial court and administrative agency decisions.  He published three editions of Utah Standards of Appellate Review while participating in more than 2,000 appellate court decisions.  
 
Judge Jackson’s experience will complement the other outstanding lawyers at Robinson, Seiler & Anderson, LC.  The firm will continue its representation of injured individuals, as well as clients in real estate, business, estate planning, tax, contract and education matters.
 

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