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770-609-1247 | Business Bankruptcy – Cumming Georgia

Call 770-609-1247 to Speak With an Experienced Cumming, Georgia Bankruptcy Attorney.

Quality of service and competence matters. We have over fourteen years of experience helping Cumming Georgia businesses and business owners deal with debt. Under the bankruptcy code you can obtain immediate debt relief. Let us help you.

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Small Business Bankruptcy – Cumming Georgia

If you own a small business, there is the possibility that you have accumulated a significant amount of business related debt. If your personal or business debt ever starts to grow so much that you feel like there is no way out, consider the possibility of filing for a Cumming Georgia business bankruptcy. Many people believe that filing for bankruptcy is the beginning of the end of being in business. However, the reality is that bankruptcy law were created by the U.S. Congress to be used by honest people in the midst of unfortunate financial situations. Bankruptcy is designed for and remains an option for those who need a way to obtain a financial fresh start. And bankruptcy can be especially helpful for owners of small businesses in Cumming Georgia and surrounding areas.

Business Bankruptcy Liability

If you are a sole proprietor or a general partner in a business, you are subject (personally liable) for the commitments of your organization. This means that if the business does not pay its debts, creditors may sue you personally and take (through garnishment and seizure) your personal assets to pay off the debts. In the event that you have limited your liability for business debts, or your business is a limited liability company (LLC), corporation, or limited partnership you may not always personally held personally responsible for unpaid business debts. However, many business owners sign “personal guarantees” for many business loans, leases and services either because they are required or they did not negotiate an arrangement that did not require one. Therefore, you may still be held liable for any of your business’ debts in the event that you cosigned or personally guaranteed the obligation. a personal guarantee will usually be included and signed in most small business loans, service agreements and leases.

Bankruptcy Options in Cumming Georgia

Determining which bankruptcy chapter is the best option for you and your business depends on your debts and how your business is structured. Chapter 7, Chapter 11 and Chapter 13 bankruptcies in Cumming Georgia each offer certain benefits and downsides which are described below.

Chapter 7 Bankruptcy for Business and Personal Debts

Chapter 7 is a form of bankruptcy available to borrowers that do not have the finances and resources to satisfy their commitments and proceed in business. Chapter 7 bankruptcy can be filed by both a person (individual or married couples) and organized businesses. In the event that you own company, corporation or LLC, you can file a Chapter 7 bankruptcy for the benefit of your business. Chapter 7 is mainly used to liquidate and close a business. The business does not get a discharge of it’s debts and can’t utilize the asset exemptions an individual or married couple can. At the point when bankruptcy is filed, the bankruptcy trustee begins to examine the business to see if it has assets that are worth liquidating to pay its creditors. A Chapter 7 business bankruptcy case is generally an favorable alternative for small business owners who wish to close their business and prefer not to sell of the business assets piece by piece or deal directly with creditors. However, remember that a Chapter 7 business bankruptcy does not absolve your of your individual personal debts on any personally guaranteed business debts.

It is important to remember that your Cumming Georgia business cannot declare Chapter 7 bankruptcy in the event that the business is not officially organized as a corporation, LLC, etc. Since a sole proprietorship (which is not organized form of business) is not a different and separate legal entity from its owner(s), all business assets and debts are actually the assets and debts of the owner(s). Therefore, a sole proprietor must file a personal bankruptcy to discharge their business debts. The advantage of this is that you can wipe out both personal and business debts while utilizing the bankruptcy asset exemptions to preserve materials, tools, inventory, equipment, etc. that you may need for your business to continue. This means that you may have the option to continue operating your business uninterrupted even after a bankruptcy. Additionally, in the event that you are personally liable for the debts of your business, a personal Chapter 7 case can discharge your personal obligations for business debts. Many entrepreneurs who file a Chapter 7 business bankruptcy also file a personal bankruptcy case as well. And many of these same entrepreneurs go on to start new businesses and ventures very soon after filing.

Commonly referred to as a bankruptcy liquidation, this bankruptcy route for a business is appropriate when a business has no prospects for future success as a profitable business and lacks substantial assets.  Because of this, Chapter 7 business bankruptcies are most often best suited for a sole proprietorship or a small business.  Under a Chapter 7 business bankruptcy case, the Bankruptcy Trustee will sell all of the business assets to satisfy outstanding debts in an organized manner, paying priority creditors first (e.g. taxes and employee benefits) before general unsecured creditors.

Another way of viewing a Chapter 7 Business Bankruptcy is that the business is going for a a “straight bankruptcy” – that company is in fact “belly-up” and the owners can consider all their investments in the business as gone.  However, if the owners of a business are also creditors of the business (by virtue of having loaned the business money) – the owners can file a proof of claim along with the other creditors.

Again, the company’s assets are liquidated by the Bankruptcy Trustee and the money raised by the selling of the business’ assets is used to pay administrative and legal fees.  In a business bankruptcy, the secured creditors are given the collateral for their secured loans – and if it is not enough to repay all their loans then the remaining y are grouped with unsecured creditors.  Bondholders and other creditors are notified of the bankruptcy by the court and usually file a “proof of claim” for money owed to them.

Generally, stockholders are not directly notified of the company’s bankruptcy by the bankruptcy court since they usually do not receive anything in the liquidation of the business.  However, in the unlikely event that there is money left over after full repayment of all creditors that filed “proof of claims” – the stockholders are notified and will also need to file a claim to be paid.

Chapter 11 Bankruptcy for Business and Personal Debts

If a business has significant assets – or may be viable with some debt restructuring – then a Chapter 11 Business Bankruptcy may be preferable. In addition, individuals that where there personal and/or business assets, debts, and income are very significant can sometimes also file a personal Chapter 11 bankruptcy case. Chapter 11 bankruptcy cases can be very expensive, time consuming and are not usually appropriate for a business unless it has significant assets and signficiant revenue, and has a viable chance for surviving with a restructuring or debt. Also, as noted above, individuals can file a Chapter 11, with one scenario being the “Single Asset Real Estate Debtor”  See 11 U.S.C. § 101(51B).

Also, a Chapter 11 is good for individuals that have had a recent discharge in Chapter 7 or Chapter 13 Case and cannot refile but need bankruptcy relief. In addition, a Chapter 11 can be good to help restructure non-dischargeable debts such as payroll taxes, recent income taxes, domestic support, etc.

Chapter 13 Bankruptcy for Business and Personal Debts

Chapter 13 bankruptcy cases can only be filed by a person or a married couple. A business cannot file a Chapter 13, although a Chapter 11 is an alternative that should be considered (but is not discussed in this article). An individual filing a Chapter 13 must meet several requirements, including limitations on the amount of debt that is owed. As of the date of this article, an individual filing a Chapter 13 must not owe more than $1,149,525 in secured debt or $383,175 in unsecured debt. If someone owes more than these amounts, they should consider filing a personal Chapter 7 case or the rarely filed, but available personal Chapter 11 case.

Cumming Georgia Business Bankruptcy In Summary

As previously mentioned, a business cannot file for Chapter 13, but can file a Chapter 7 or a Chapter 11. And the owner(s) of sole proprietorships are personally obligated for the debts of their business. Therefore, a personal Chapter 7 or Chapter 13 bankruptcy (or the rarely filed personal Chapter 11) are the bankruptcy options available. If the owner of a sole proprietorship files a Chapter 13, all their business debts are usually included in the Chapter 13 payment plan. The Chapter 13 bankruptcy is intended to give the filer a chance to keep most or all of their property and pay some or all of their debts through a monthly payment plan, making it a great choice for sole proprietors with significant assets. The same as a Chapter 7, a Chapter 13 bankruptcy allows small business owners to discharge their personal responsibility for business debts. And a Chapter 13 is normally utilized by business owners with significant assets they want to maintain, or who aren’t eligible to file under Chapter 7 (due to income) or a personal Chapter 11 case.

If you are a business owner facing personal debts or other economic hardship and you have questions filing bankruptcy, call us at 770-609-1247 to discuss how we can assist you.

We are a debt relief agency. We help businesses and people file for bankruptcy relief under the Bankruptcy Code.

Coleman Legal Group, LLC  has offices conveniently located at:

Cumming Georgia
The Avenue Forsyth
410 Peachtree Parkway
Building 400, Suite 4245
Cumming, GA 30041
Phone: 770-609-1247 | Map

Alpharetta Georgia
North Point Park
5755 North Point Parkway
Suite 51
Alpharetta, GA 30022
Phone: 770-609-1247 | Map

Other Offices Throughout the Atlanta Metro Area

Copyright © 2018 | Coleman Legal Group, LLC | All Rights Reserved. Coleman Legal Group, LLC • 5755 North Point Parkway, Suite 51 • Alpharetta, GA 30022 • 770-609-1247 DISCLAIMER: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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