Dissolving Your Small Business

Discovering that your business is deep in debt with little chance of being able to manage that debt and pay back creditors is a daunting realization. You may feel disheartened, discouraged, and maybe embarrassed at the direction that your company has taken. If you find that your business is struggling, you should know that you are not alone. Each year many businesses lose control of their debts and must decide whether they should continue trying to turn a profit or whether they should dissolve the business.

While dissolving your business may seem like giving in to failure, on the contrary, it can be a smart business decision for companies who cannot realistically manage their debts any longer. When your debts are so high that there is little chance of being able to pay them back, it may be better to dissolve the business now, essentially cutting losses, so that you can pursue other business ventures in the future. Chapter 7 bankruptcy allows a sole proprietorship, partnership, or corporation to be liquidated to pay back debts.

Another advantage to a Chapter 7 bankruptcy is that immediately after the bankruptcy is filed, the business is protected by the automatic stay provision under bankruptcy law. This means that while the bankruptcy is pending, creditors cannot harass or file lawsuits against the business or its owners for payment. Creditors can be penalized for violating the automatic stay, particularly if they were aware that the business had filed for bankruptcy but still chose to pursue payment.

Contact Us

Dissolving your small business is one option available to a struggling company. To learn more about your options and how you may be able to liquidate or restructure your business through bankruptcy, please contact the New Orleans bankruptcy lawyers of Kervin & Young, LLC today at 504-599-5906.