Business Owner Responsibility in Bankruptcy
Operating a business requires a huge commitment of time and resources on the part of the owners. There are frequently significant start up costs and the ongoing costs associated with running the business. If there is ever a time where demand for your product or service starts to decline and your income no longer covers business-related expenses, it is important to understand your rights and responsibilities.
If the business is a corporation, the business itself is considered the debtor and the owners or shareholders are generally not held personally liable for the debts. However, owners are frequently required to sign personal guarantees for the corporate debt making them personally liable. If the business is a sole proprietorship or a partnership, owners themselves are the debtors and are held liable for the debts of the business.
Understanding Your Options
For many companies, Chapter 11 business bankruptcy gives the business time to reorganize their debt and devise a plan for the future of the company after bankruptcy. For others, especially sole proprietorships, personal bankruptcy may be a more appropriate course of action. An experienced bankruptcy attorney can help you to understand your options and give you all the information you need to make a sound decision.
At the Collegeville, Pennsylvania, law firm of Nahrgang & Associates, P.C., we have worked with many businesses that needed help getting relief from an excessive debt load. We offer complete Chapter 7, Chapter 13 and Chapter 11 bankruptcy services as well as bankruptcy alternatives. We will work with you to fully understand your situation and your goals in order to build a customized debt relief solution specific to your needs.