In a recent interview, leading bankruptcy attorney Bryan Keenan, founding partner of Bryan P. Keenan & Associates in Pittsburgh, PA, revealed how a Chapter 7 bankruptcy can benefit business owners. —
For more information please visit https://bryankeenanattorney.com
When asked for a comment, he said, "With business owners around the country taking a hard hit from COVID-19, many are wondering what the upsides are in applying for Chapter 7 bankruptcy. Here are a couple of things to keep in mind if considering declaring bankruptcy during these times."
The first thing to know about Chapter 7 is that both legal business entities and individuals can file.
“This is particularly beneficial for small business owners, as they can either file for Chapter 7 for themselves personally or on behalf of the business. And for sole proprietors, both business and personal debt can be eliminated in the same Chapter 7 bankruptcy filing,” he said.
Chapter 7 bankruptcy offers further benefits to sole proprietors, according to Keenan.
When asked to explain further, Keenan commented, "If you're a sole proprietor and your business debt surpasses your personal debt, you are not required to fulfill the income requirements of the means test to file for Chapter 7."
He was quick to add that sole proprietors can use exemptions, which help determine which personal and business assets the filer can protect and hold onto.
"Let's say that your business mainly provides services and doesn't use much equipment or inventory in its day-to-day operations. In this case, there's a good chance that you'll be able to continue running your business by using exemptions after eliminating the business debt in a Chapter 7 case," he said.
Keenan continued by saying, “However, this isn’t the case in all Chapter 7 bankruptcies. So if you're unable to shield all the property that is necessary for you to operate your business, the Chapter 7 trustee will sell any of your nonexempt property."
When it comes to corporations or limited liability companies, Chapter 7 lifts the burden of shutting down the business off the owner's shoulders.
“What Chapter 7 essentially does for these types of companies is to pass the responsibility of liquidating the company’s assets and repaying debt to the creditors to the bankruptcy trustee.”
"If you're a business owner and you're unsure whether filing for Chapter 7 is the right move for you to make, then get in touch with an experienced bankruptcy attorney in your area to explore your options."
Name: Bryan Keenan
Email: Send Email
Organization: Bryan P. Keenan & Associates
Address: 993 Greentree Rd #101, Pittsburgh, PA 15220, USA
Source URL: http://RecommendedExperts.biz
Release ID: 88974694