Navigating difficult financial times can be especially complicated for small business owners. Whether you need to reorganize your company’s debts to continue operations or are planning to close up shop, business bankruptcy can be a responsible choice. As with personal bankruptcy, however, business bankruptcy can be a complex process and carries significant repercussions, so most people choose to seek bankruptcy assistance from a skilled attorney.

Below, Robert A. Schwartz, an experienced bankruptcy attorney in Rochester, New York, answers a few frequently asked questions to help you determine whether business bankruptcy is the right choice for you.

3 Frequently Asked Questions About Business Bankruptcy

1. Can I File For Business Bankruptcy Without Filing For Personal Bankruptcy?

This depends on the structure of your business. If it’s a sole proprietorship, it is not considered a separate legal entity, so a personal bankruptcy will include your business obligations and is your only option. If it’s organized as a partnership or corporation, you can file for business bankruptcy without necessarily entering personal bankruptcy, although many business owners choose to do both.

2. What Kind Of Bankruptcy Should My Business File For?

You may file for business bankruptcy under either Chapter 7 , Chapter 13, or Chapter 11. Each has benefits and drawbacks, depending on the circumstances surrounding your business. Chapter 7 bankruptcy is most often used for companies that wish to close completely and liquidate all assets. Chapter 13 can be utilized by a sole proprietor to pay back secured debt arrears, pay overdue tax obligations, and to eliminate unsecured debt through a repayment plan.  The business can remain operational through Chapter 13.  Chapter 11 business bankruptcy facilitates a reorganization of your company’s debts while allowing it to continue operating. Chapter 11 is significantly more complicated and expensive than Chapter 7 or 13, and business owners who seek to file Chapter 11 bankruptcy will almost certainly require bankruptcy assistance from an experienced attorney.

3. How Will A Business Bankruptcy Affect My Personal Finances?

Again, this depends on how your business is structured. If it’s a sole proprietorship, your business and personal finances are legally considered one and the same. For partnerships or corporations, the personal effects of a business bankruptcy will depend upon your level of responsibility for your business’ debts. Many small business owners also choose to file for personal bankruptcy under Chapter 7 or Chapter 13 if their business bankruptcy still leaves them in a position of significant debt. An experienced bankruptcy attorney will be able to help you assess your options and choose the best course of action.

If you are considering a business bankruptcy in Rochester, seek out assistance from an experienced, conscientious lawyer like Robert A. Schwartz. Visit his website for more information about your bankruptcy options, or call (585) 334-4270 today to schedule a consultation.