New Jersey business owners like you can’t predict every ebb and flow of your business. Unfortunately, sometimes circumstances outside of our control make it so that we fall into debt. If you find yourself in that situation, there are still ways you can get back out of debt.
The Balance Small Business takes a look at three different types of bankruptcy options that are available to business owners. Today, we’ll take a look at Chapter 13: personal bankruptcy. Though this is generally meant for individuals and not business entities, it can still apply to you if you have a sole proprietorship. This type of bankruptcy is similar to Chapter 11 in that you work with others to create a new repayment plan, which must then be approved by a bankruptcy court.
The final goal of your repayment plan is one of the things you’ll work out during your meetings. It will often depend on how much you owe, how much you’re currently earning, and your personal assets. If your business assets and personal assets are intertwined, like they are in a sole proprietorship, Chapter 13 is a decent option to check out. This is especially true if you want to avoid the possibility of having to liquidate valuable assets like your car or home.
Different bankruptcy options will serve people in different ways. Trying to decide what’s best for you personally may feel like a tricky endeavor. It’s best to speak with a knowledgeable attorney before making any final decisions, as they will have some of the best advice and expertise to offer you.