[David Stevens, Esq. answers your questions about owning a business and filing for bankruptcy ]
That's a question I'm asked very often, and the answer is of course you can. The issue is not whether you own a business. The question is does the business have such value that it's a concern for us, and even if it did, how do we treat that value in a bankruptcy context?
You and Your Business are Not the Same
What you own is an interest in your business. If it's an LLC, then you have a membership interest. If it's a corporation, it's shares that you own. The business, however, is not you. Hopefully, you've kept your books and records cleanly as well, but we can talk about that when we get together.
The Value of your Business is Important
What is of interest to us in a bankruptcy context is determining what the value of your membership interest or your stock in that company. The company may have lots of assets, but if it also has lots of debt, the net value, what your interest is worth, isn't that valuable. That determination of value oftentimes requires us to talk to your accountant and get a written opinion.
But in most cases that we file, the debtor may own a small business that generally isn't that valuable to anybody but themselves. In those cases, the bankruptcy is typically not going to impact the business at all. If there was significant value, again remember it is only the debtor’s interest in the business that is part of the bankruptcy and not the business itself and not the business assets.
Yes, You can File Bankruptcy if you Own a Business
So, don't be concerned. In fact, most people who own a business have contemplated it at one time or another, right? I mean, let's face it. Owning a small business is difficult, and we have a lot of clients that own small businesses. Your business is not at risk. The interest that you have in the business potentially is. Business assets are not. Business customers are not going to learn about your individual bankruptcy.
Let's talk about it. Don't be overly concerned about it. We can have a consultation, and if there's concerns, we'll raise them then. At least, let's sit down and talk about it and figure a way around it.
Whether you need to completely eliminate your debt through Chapter 7 bankruptcy, or need to reorganize your credit payments through Chapter 13 or Chapter 11, we are well qualified as a full-service bankruptcy law firm for people in these and other New Jersey counties: Passaic County, Hudson County, Essex County, Bergen County, Morris County, and Sussex County. Call us today at 973-870-0434 or toll free 888-412-5091.