If you are the owner of a small business that has become overwhelmed by debts, you may have been advised to file Chapter 11 Bankruptcy. This form of Bankruptcy is complex, time-consuming and prohibitively expensive. With proper counseling, most people and small businesses inquiring about Chapter 11 are better served by Chapter 7 or Chapter 13.

Chapter 7 Versus Chapter 13 Bankruptcy

While Chapter 7 Bankruptcy is an option for small businesses, it usually requires that the business be shut down. If you have invested a significant amount of time, money and energy into your business, you may not want to take this step. Chapter 13 Bankruptcy may allow you to eliminate your debts while keeping your doors open.

Does Your Small Business Qualify for Chapter 13?

Business Bankruptcy law is complex. Chapter 13 Bankruptcy can be used by a sole proprietorship to create a payment plan to address debts for leased equipment, back taxes, business vehicles and more. The payment plan is built to work within your means, stretching out between three and five years. After the payment plan is completed, the remaining debts will be discharged.