Are you a struggling business owner? If you have been financially drained due to a fraught business model, and you are struggling with debt payments and taxes, you should know that bankruptcy could help you.
First, you need to know that there is a difference between business debt and other forms of debt when it comes to bankruptcy. Keep in mind, filing for personal bankruptcy does not discharge a business debt—it allows a business owner to discharge his or her personal obligation to pay the business debt, depending upon the ownership situation.
If your business has debt obligations to customers, if you file you file bankruptcy, you may not be personally obligated to pay the debt if you are the sole proprietor. If you have questions about this, you should talk to an attorney. Where this gets confusing is in instances where a venture is financed on personal credit cards or loans, or corporate credit cards and loans. Receiving outstanding legal advice will help you with any questions you may have.
If you file for Chapter 7 bankruptcy, you may be able to discharge any personal debts relating to your business, including personal credit card debt and other unsecured forms of debt. This could potentially occur if you are a sole proprietor for a business, and not operating it as a separate legal entity like a partnership, corporation or limited liability company.
As far as taxes go, there are ways you can discharge specific tax obligations through bankruptcy if you meet certain requirements. When it comes to a business, these would have to be personal tax debts that you have taken on as an owner.
Can a Chapter 7 Bankruptcy Help Me?
Speaking to our bankruptcy attorney is a great idea if you owe a significant amount in back taxes as a business owner. Keep in mind, through bankruptcy, an automatic stay goes into effect, stopping collection attempts.
Additionally, you may be able to eliminate other forms of debt, like credit card debt and medical bills, freeing up money to pay back taxes or business obligations that are not discharged.
Again, how your debts are discharged will depend on how your business is structured. When you meet with our attorney, he can work with you to determine the best plan for you moving forward. If you are struggling to pay off debts, speak to our Washington DC and Maryland bankruptcy lawyer.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: A 2011 study found that 60 percent of people who file for bankruptcy had salaries of less than $30,000.