Debt Relief When a Small Business Fails

 Posted on September 11, 2024 in Bankruptcy

The fact is that many small businesses fail within their first year. Even if you had a great concept for a business and are very experienced, there is a chance that your company simply will not be able to stay open. This is often due to factors beyond the control of the business owner. It could be that you opened your business at a time when many of your potential customers were struggling financially, or that you were overshadowed by a larger corporation with a higher advertising budget that opened a new location around the time you opened your doors. If you are planning to close your business, Chapter 7 bankruptcy can help you eliminate your business debt. An Arlington, TX bankruptcy lawyer can help you determine the best course of action.

Why Liquidation Bankruptcy Works for Failing Businesses 

Chapter 7 bankruptcy involves selling off your business’s assets to pay off its creditors. Anything owned by your business entity will be liquidated, and the money will be used to pay off any debt your company still owes. When this process is complete, any remaining business debt will be cleared and you can walk away as if nothing happened.

Chapter 7 bankruptcy tends to work well for businesses that are closing their doors. Since you will no longer be operating, you likely no longer have any use for the equipment your company needed to operate. For example, if you had opened a restaurant, you probably have no desire to keep a four-vat deep-fryer, a commercial pizza oven, and a collection of dining tables - and nowhere to put them if you did. You probably could not take these itmes home to keep using them. Even if your business had no debt and you owned these items free and clear, you would most likely sell them.

With Chapter 7 bankruptcy, you are essentially killing two birds with one stone. You can simultaneously eliminate your company’s debt and have help clearing away equipment that is no longer of any use to you. When the process is over, it is almost like your company never existed. You get a fresh start, free of debt, and can start pursuing the next step in your career.

Contact a Tarrant County, TX Bankruptcy Attorney for Small Businesses 

Acker Warren P.C. is experienced in helping small businesses eliminate their debt when closing. Our dedicated Arlington, TX small business bankruptcy lawyers have more than 20 years of combined experience. Contact us at 817-752-9033 to start with a free consultation.