If you are an owner of a small business, it is very likely that you face the pressures and stress of you company in full force, on a daily basis. Whether this is to create a product on time, or to make sure all of your employees are adequately covered on their insurance policies, or dealing with the pressure hitting your quarterly sales goals; a business no matter the size can be overwhelming. While there are many successful businesses in the world today, there are also countless groups that are struggling with making their quotas; and perhaps this is you. Are you realizing that your income is being quickly swallowed up in debt and there is no way to pay it off? Are you concerned that you will lose your business to the bank if you are unable to pay back your debt?

What exactly is small business bankruptcy, then? In essence, it means that for whatever reason a small company is unable to stay afloat. These downfalls may be a result of dozens of possibilities such as low sales, lawsuits, and many others. In order to attempt to save yourself and your company, bankruptcy is an option that offers federal protection to those hoping to get their business back in order financially. This can look differently for every struggling business, though bankruptcy will offer a way to repay your debt or eliminate it entirely. Determining which route to take can be decided upon with the help of your bankruptcy attorney who will have the opportunity to look closely at your specific case.

Small businesses have the option for 3 different forms of bankruptcy filings that may suit their company's needs financially. First off, Chapter 7 business bankruptcy is often the route that people will choose when they know they are in way over their heads with their debt. This option is considered to be debt elimination and as opposed to try and come up with a way for you to repay your debt, which is essentially impossible, this option will actually wipe it clean; the majority of it anyway. Also, if the business does have large assets just yet, this may also be an option for you as well. It is important to realize though, that when most companies file for this chapter of bankruptcy they are basically saying that they are closing their doors with the company.

In this case as the company comes to a close, there will also be a trustee who is in charge of making sure that the assets available can be distributed to some of the creditors. As the assets are handed off to help with some of the debt, the owner of the small business will then no longer be held responsible for the remaining debt by way of the bankruptcy filing. Chapter 11 business reorganization is another common way for small businesses who are dealing with debt but still want to fight and save their company. By choosing this route the company can fight for their future existence, and though it may be hard for a time; they can rise out of the ashes.

A court appointed trustee will evaluate your claim and reorganize the debt in a way that is effective for the creditors. After the plan has been laid out, the creditors will all then have to agree on the plan for repayment. In many cases this repayment plan helps the debt because it gives the company an extended period of time for repayment without facing the threat of losing their company to the creditors. It is important to know that this process must be done with the counsel of a skilled bankruptcy attorney because it is a lengthy and detailed process. In many cases the bankruptcy plan could take up to a year to work through before being implemented, and then many years will be spent after that making the repayments.

Lastly, there is the option of Chapter 13; though in most cases it is used for the consumers rather than a business. In some cases a sole proprietor has the option to file for Chapter 13; which is also considered to be a creditor repayment plan. This option is often used for those sole proprietors whose personal assets are incorporated with their business; in this case helping protect yourself in the long run from losing your home or pother assets. Whatever the case may be for you and your company, contact a trusted and experienced bankruptcy attorney in your area with specific practice with businesses. Bankruptcy is a lengthy process, but can be worth it if done properly!