Can I maintain a sole proprietorship if I file chapter 13 business bankruptcy?

A sole proprietorship vs partnership when it comes to bankruptcy can be an important factor in determining what happens in a bankruptcy filing. The good news is that it does not matter what type of business you own. When you file Chapter 13 bankruptcy, no assets are lost during the bankruptcy. As long as the business is likely to provide you with a positive financial future, you are likely to keep it.

Sole Proprietorship

If you were to file Chapter 7 bankruptcy, it would be up to the state’s bankruptcy exemptions to protect your partnership business’s assets as well as any assets your own in a sole proprietorship. What is different is that you are filing Chapter 13, which means that no assets are touched for the most part. There are a few things to keep in mind through this process, though.

• If you are behind on a business loan and are unable to get caught up as part of the bankruptcy process, those assets may be lost if the loan is a secured loan.
• In some situations, it may be best to let go of some property through the bankruptcy, especially if you plan on shuttering the business.

In nearly all situations, it is best to hire an attorney to help you to protect your business’s assets as well as your personal property through bankruptcy. Chapter 13 bankruptcy attorneys can help you to protect many of your assets so that you have a strong financial future.