Can I Keep My Business While Filing for Bankruptcy

Can I Keep My Business While Filing for Bankruptcy?

For many business owners in Maryland, their business is not just a source of income but a labor of love. However, when faced with financial difficulties and mounting debts, bankruptcy may seem like the only option. The good news is that bankruptcy doesn't necessarily mean losing your business entirely. In this article, we'll explore how you can potentially keep your business operational while seeking relief through bankruptcy.

Answering the Question: Can I Keep My Business While Filing for Bankruptcy?

Types of Bankruptcy and How It Can Affect Your Business:

When considering bankruptcy as a business owner in Maryland, it's essential to understand the different chapters available and their implications:

Chapter 11 Bankruptcy

Chapter 11 allows businesses to reorganize while continuing operations. This option is suitable for various business entities, including limited liability corporations (LLCs) and partnerships. The Small Business Reorganization Act of 2019 has made Chapter 11 more accessible and affordable for small businesses in Maryland, allowing them to develop a repayment plan to satisfy creditors while keeping their business running.

Chapter 13 Bankruptcy

Sole proprietors of businesses can utilize Chapter 13 bankruptcy to restructure debts and develop a repayment plan if they have a steady income. This option enables sole proprietors to continue operating their businesses while avoiding the liquidation of business assets.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is typically for individuals and businesses with overwhelming debts. While sole proprietors may have the opportunity to keep their service-oriented businesses intact, trustees may opt to shut down and liquidate assets of product-oriented businesses to repay debts. However, for LLCs and corporations, Chapter 7 usually results in the closure of the business and the liquidation of assets to satisfy creditors.

Will Multiple Bankruptcy Filings Be Necessary and/or Appropriate:

In some cases, it may be advisable for both the individual business owner and the incorporated entity to file for bankruptcy, especially if there is overlap in personal liability and business debts. This approach can help address debts comprehensively and provide the best chance for financial recovery.

Ready to Speak with a Bankruptcy Attorney in Baltimore, MD?

If you're a business owner in Maryland facing financial challenges and considering bankruptcy, don't navigate the process alone. At The Law Offices of Nicholas J. Del Pizzo, III P.A. in Baltimore, Maryland, our dedicated attorney, Nick Del Pizzo, is here to assist you with your legal needs, even outside regular business hours. We offer personalized attention and strive to find the best resolution for your situation, whether it involves bankruptcy, foreclosure, personal injury, or medical malpractice. Contact us seven days a week, and let us help you navigate your path to financial recovery. Your case becomes our cause, and we're committed to achieving the best possible outcome for you.

Scroll to top