Consumer Law

"Can a Small Business Owner File Chapter 7 Personally and Still Keep His Business?"

By M. Stan Herring

The BKBlog has posted an article that discusses if an individual can file for Chapter 7 bankruptcy and still keep their business. Often times, the owner could have used personal credit cards and finances for the business, so they are being held responsible for that debt.

This article suggests that one needs to close down the business if filing for Chapter 7 and waiting 6 months to a year before reopening. This enables the owner to have a fresh start.

Except in the case of a personal service business that has no inventory or receivables or any value other than the daily efforts of the owner, my experience has been that if you file a Chapter 7, the trustee will demand that you cease operations and turn over the books, the keys and the inventory to the trustee's office.

If you have questions or have had problems with issues relating to bankruptcy, feel free to contact us.

Full post as published by Alabama Consumer Blog on May 10, 2009 (boomark / email).