If your business is drowning in debt, Chapter 11 bankruptcy may help you resolve your debt problems while maintaining business operations. Depending on your circumstances, Chapter 11 may allow you to maintain ownership of your business or may transfer ownership to a creditor or other party.
Whatever your circumstances, the business bankruptcy lawyers in Naperville at Lynch Law LLC can help. We have decades of combined experience handling bankruptcy cases for clients in DuPage County and throughout the Chicago metro area. We understand how stressful the process can be and take great care to educate our clients on their options and help them manage expectations.
Bankruptcy for BusinessesIf your business is in the red, your creditors will probably threaten legal action against you personally. How much they can collect will depend on how your business is organized, whether you personally guaranteed any repayments, and whether you decide to file for bankruptcy.
Sole Proprietors & PartnershipsThe IRS holds all business owners personally liable for unpaid payroll taxes, regardless of their business' structure.
If you're a sole proprietor, you and your business are legally one and the same, so you're personally responsible for all debts. If there isn't enough money in the business to pay these debts, creditors can and will take your personal assets.
In a general partnership, each partner is personally liable for the entirety of the business's debts (and any partner can usually bind the entire partnership to a business deal - a scary combination). This means that if there isn't enough money in the business to pay the debts and your partners are broke, creditors can take your personal assets to pay all of the business's debts, not just your share.
If your business is organized as a corporation or a limited liability company (LLC), your personal assets are usually protected from business creditors - unless you specifically gave up your so-called "limited liability" protection. Unfortunately, you may have done so if a bank or other creditor required a personal guarantee and/or personal security before loaning you money, leasing you space, or extending credit. Such personal guarantees undo your limited liability, allowing the creditor access to your personal assets if the business can't cover the debt. A creditor can also ask a business owner to secure a business debt by pledging specific personal property, such as a house, boat, or car.
Chapter 11 bankruptcy is a complex process that should be handled with care and attention to detail. For some businesses, it is the best option to reorganize and resolve debt problems. Our Naperville Chapter 11 lawyers can help you explore all viable options, including debt negotiation and settlement. The decisions are yours - we are here to guide you and be your strong advocate throughout the process.
We are equipped to represent clients through all aspects of the Chapter 11 bankruptcy process, including:
- Filing the Chapter 11 voluntary or involuntary petition
- Preparing and filing Chapter 11 bankruptcy schedules
- Negotiating, preparing, and filing the Chapter 11 reorganization plan
- Attending all necessary hearings
- Guiding clients through the Chapter 11 reorganization process
If you're in imminent danger of losing your family's home or livelihood, our Chapter 11 bankruptcy lawyers in Naperville may be able to help. We are available to represent business owners in DuPage County and beyond.
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