Small Businesses Turn to Chapter 7 When Dealing with Financial Struggles

Since the economy has yet to turn itself around, small businesses and individuals alike are turning to Chapter 7 bankruptcy when they have hit financial rock bottom. However, there are differences between individuals and small businesses when it comes to filing for Chapter 7 bankruptcy.

When a business decides to file, it will usually be asked to sell off any assets to be used towards debt payment, after which it will generally close its doors forever. In 2010 alone 1.1 million bankruptcies were filed under Chapter 7. While small businesses usually account for a small percentage of the overall bankruptcies filed, there were still 56, 282 businesses that filed last year. While this number may seem staggering, it represents a 7 percent decrease from the year before.

Depending on the type of debts owed, small businesses can often benefit from filing for Chapter 7 bankruptcy. It gives many a clean slate financially, although it does remain on your credit record for as long as ten years.

If you would like to discuss your legal options, contact us to set up a consultation with a San Antonio bankruptcy attorney.