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Roseville, CA Small Business Bankruptcy (7+13+11+11 Small Business) Attorney

If you own a small business in Roseville or the surrounding area that is experiencing financial difficulties, you should speak with our experienced Roseville, CA small business bankruptcy attorneys. Our team of knowledgeable lawyers will review your situation and advise you of your legal options.

Depending on your situation, you might be able to file for bankruptcy and continue operating your business. In some instances, filing for bankruptcy is the best option for winding down a struggling business. An important thing to remember is that filing for bankruptcy does not preclude you from starting a new business.

Because a business bankruptcy is more complicated than a personal case, they require significantly more time and planning. The Bankruptcy Group has years of experience handling complex business liquidations and reorganizations. Whether you need to file a Chapter 7, Chapter 13, or Chapter 11 case, our team of seasoned attorneys will guide you through the process. To develop a business exit strategy or reorganization plan, call our law offices at 1-800-920-5351.

Chapter 7 Bankruptcy for Small Business in Roseville, CA

Chapter 7 is typically considered a “liquidation” bankruptcy for individuals and couples with significant unsecured debt and limited income and assets. However, Chapter 7 is also a way small businesses can resolve their financial problems by legally liquidating the company. After the business files for bankruptcy in its name, the California bankruptcy court appoints a trustee to oversee the inventorying and selling of the business assets. The proceeds of the sale would be used to pay the business’ creditors.

Typically, a Chapter 7 case is the best option when a small business’ debts are so great that reorganizing the debt or restructuring the payments is not feasible.

Any type of business is permitted to file Chapter 7, including partnerships, corporations, and sole proprietorships organized as limited liability companies. However, for large corporations and partnerships, a Chapter 7 bankruptcy can become very complex and challenging – especially if the owners or partners do not agree with the direction.

Bankruptcy is typically a complicated legal process. This is especially the case in a business situation. If your business is struggling, contact our experienced Folsom, CA, bankruptcy attorneys. Our office will thoroughly review your individual circumstances to determine if filing for Chapter 7 is the right option for you. We will also advise you of other debt relief alternatives.

Chapter 11 Bankruptcy in Roseville

Chapter 11 usually comes up in the news when large and well-known corporations are facing financial difficulty. However, the majority of Chapter 11 cases are filed by smaller businesses without national reputations.

Under Chapter 11, a small business could restructure its finances through a Chapter 11 reorganization plan. The bankruptcy court must approve this plan. By modifying payment terms and reducing financial obligations, a Chapter 11 plan could help a small Roseville business balance its expenses and income to regain profitability. Depending on the circumstances, a small business could use Chapter 11 to sell a portion of its assets to pay some of its debt.

New Small Business Reorganization Act of 2019 and Roseville Small Businesses

In February 2020, as part of the COVID relief packages, the New Small Business Reorganization Act of 2019 went into effect. This new law might influence a small business owner’s decision to file for bankruptcy.

Under the new law, Chapter 11 for small businesses is more streamlined. Instead of a creditors committee, a trustee will be appointed to manage payments. Additionally, monthly reports would no longer be required and it might be possible to cram down some obligations. In some ways, this type of Chapter 11 case will function similarly to a Chapter 13 case, where a debtor will only be required to pay whatever disposable income they have available.

Qualifying for a Streamlined Chapter 11

To qualify under the Act, a small business must meet four requirements.

  1. The business’ total debt must be less than $2,725,625. This amount might increase every three years.
  2. The business must be engaged in a commercial activity other than a single asset real estate debtor.
  3. At least 50% of the business’ liabilities arose from business or commercial activities.
  4. The small business must not be a member of a group of affiliated debtors, for example, a corporate organization whose total debt exceeds the statutory threshold.

How a Chapter 11 Bankruptcy Works Under the New Act

When a Roseville small business files for Chapter 11, a trustee will be appointed. The trustee’s role is to collect payments and distribute these payments to the debtor’s creditors. The trustee will also monitor the small business’ plan of reorganization, possibly objecting to the plan if it finds that it is not equitable to all creditors.

The small business debtor will have a status conference scheduled within 60 days of filing the bankruptcy. Additionally, a report must be filed 14 days before the scheduled conference and a plan must be filed within 90 days. Our Roseville Chapter 11 bankruptcy lawyers will work with you to ensure the plan is fair and equitable.

A small business Chapter 11 bankruptcy could last between three and five years. Once the plan is successfully completed, the court should enter a discharge order eliminating any remaining unsecured debt.

Chapter 13 and Small Businesses in Roseville, California

Only an individual is permitted to file a Chapter 13 bankruptcy. However, Chapter 13 could be used to restructure debt if the small business is owned and operated by an individual, such as a sole proprietorship. Therefore, if the business is a partnership, corporation, or limited liability company, Chapter 13 is not a viable option. Additionally, Chapter 13 cases are subject to statutory debt limits. Our Roseville Chapter 13 bankruptcy lawyers will review your unique situation to determine if Chapter 13 is a viable option.

Roseville, CA Small Business Bankruptcy (7+13+11+11 Small Business) Attorneys Offering Debt Relief Options

At The Bankruptcy Group, our experienced team of Orange County small business bankruptcy attorneys understands the challenges associated with a reorganization or the winding down of a struggling business. Call 1-800-920-5351 if your business is experiencing financial hardships and you need debt relief.