Small Business Bankruptcy
Every year, thousands of businesses of varying sizes are unable to continue operating because of severe debt. This inability to pay off creditors leads many otherwise strong business ideas to look for other options. For many of these cases, filing for bankruptcy is the only choice when it comes to deciding what to do next.
Considering the economic downturn in 2008, many sole proprietorships and small businesses in Covington, Florence, and Cincinnati, for example, have been operating in a difficult economic environment, leading a great deal of them to bankruptcy.
Although nobody wants to go through the bankruptcy process, particularly when it comes to a business that they have put a great deal of time into, filing may be the best option when considering your long-term goals. Bankruptcy can allow you to pay off your debts and move forward with your business.
Understanding your options and making the necessary decisions when it comes to your Ohio or Kentucky business will allow you to handle your financial issues in the most productive manner possible. A bankruptcy attorney can provide you with dedicated representation through this complex process so that you can focus on your business's future.
Northern Kentucky and Greater Cincinnati Small Business Bankruptcy Lawyer
Having a strong plan when entering a situation that involves the financial well-being of your business is of paramount importance. With the help of an experienced and knowledgeable business bankruptcy attorney, you will not have to worry about submitting forms or arguing your case and will be able to set your sites on your future and move forward without creditor harassment.
Eric Steiden is a bankruptcy lawyer who has 25 years of experience helping individuals and businesses address their debt problems. His law firm is committed to the clients they serve and has an unwavering adherence to integrity that has allowed them to represent Ohio and Kentucky businesses with high integrity. As a result, Steiden Law Offices enjoys a strong reputation amongst the bankruptcy courts.
Steiden Law Offices has two Cincinnati locations that cater to individuals and businesses throughout Hamilton County, Ohio. This includes the cities of Cincinnati, Norwood, Forest Park, Blue Ash, Montgomery, Reading, Springdale, North College Hill, Harrison, Madeira and more.
In addition to their two Ohio locations, Steiden Law Offices maintains two Kentucky locations, one in Florence and the other in Covington. Along with helping people achieve freedom from debt in these two great cities, Eric and staff also proudly represent individuals, families, and businesses in Erlanger, Edgewood, Elsmere, Villa Hills, Fort Mitchell, Taylor Mill, Fort Wright, Ludlow and more.
To schedule a free and confidential consultation to go over the specifics of your Kentucky or Ohio bankruptcy case, call (888) 877-3328 or send an online message today. During your discussion with the experienced attorneys at Steiden Law Offices, you will determine which debt relief options may be best suited to your business's situation and long-term plans. Learn more about your options so you can make an informed decision about your business's future.
Small Business Bankruptcy Information Center
- Small Business Bankruptcy Basics
- Why File for Small Business Bankruptcy
- Tax Consequences in Small Business Bankruptcy
- Small Business Bankruptcy Legal Resources
Chapter 7 – If your business is a sole proprietorship or a general partnership, you are liable for all of your business's debts. This means that Chapter 7 will potentially allow you to wipe them all out. If your business is a separate legal entity, such as a corporation or limited liability company, you will be responsible for debts if you personally signed or guaranteed. If you did not personally sign or guarantee, the corporation or LLC will have to file its own bankruptcy case to discharge them.
In cases where businesses attempt to try and fix the mistakes they made in order for it to continue in the future, the court may want to close the business down, at least on a temporary basis. Although for businesses that do not have a lot of assets, keeping the doors open may be an option.
Chapter 13 – This type of bankruptcy protection allows the business to keep its assets while reorganizing and paying off its debts. Chapter 13 is sometimes best for those operating a sole proprietorship or general partnership but is not available for corporations or limited liability companies (LLC). Since a sole proprietorship is not considered separate legal entity distinct from its owner, filing for Chapter 13 will provide the same benefit to the business.
This route is usually taken when you want to continue operating your business while setting up a three to five-year repayment plan in order to reduce your debt. The advantages of Chapter 13 include the ability to wipe out business debts, pay off priority creditors, reduce the amount of certain secured debts, all while allowing you to retain your business's assets.
The business environment in the United States, at the moment, is extremely precarious. This has led many otherwise strong entities to require solutions to their insolvency issues. Some of the more common reasons why you, as a small business owner, may consider bankruptcy include:
- Debt has grown to unsustainable levels that will be impossible to pay back;
- The need to keep creditors and the various bill collectors from harassing you and your employees;
- The business is currently under an expensive commercial lease, sales contract, or equipment lease that has made operating profitably impossible;
- The business was on the losing end of a lawsuit and you cannot afford to pay the amount ordered by the judge;
- The business has added a great deal of debt and you need to lessen these obligations in order to continue paying your mortgage, auto loan or other accounts payable.
Debtors must continue to file appropriate tax forms and deposit payroll taxes withheld for employees even while bankruptcy is being filed.
The Internal Revenue Service (IRS) holds business owners personally liable for unpaid payroll taxes. These taxes include withheld state and federal income taxes, Medicare and Social Security taxes and unemployment insurance taxes. When a business declares bankruptcy, the IRS is able to take personal assets to satisfy these debts.
The IRS does provide a few options with regard to settling unpaid taxes that are particularly appropriate in bankruptcy cases. In most of these cases, they will set up an installment payment plan, and in rare cases, the IRS may accept an offer for less than the total amount due.
Installment Agreements and Settlement Plans – These plans give options to those who cannot resolve their tax debt immediately. An installment agreement can be a reasonable payment option because it allows for the full payment of the tax debt in smaller, more manageable amounts.
Offer in Compromise – This is a plan that helps taxpayers if they are unable to pay a tax debt in full and an installment agreement is not an option. In most cases, an Offer in Compromise is looked at as a last resort after the taxpayer has looked at all other payment options.
The Federal Bankruptcy Code has a provision that says, if the individuals in debt does not file a return that is due after the beginning of the bankruptcy case, or gains an extension for filing the return prior to the due date, the taxing authority may ask that the court either throw out the case or change the case to a different chapter of the Bankruptcy Code. If the debtor does not file the required return or obtain an extension within 90 days after making the request, the bankruptcy court is required to dismiss or convert the filing.
United States Small Business Administration – This is the primary website for all relevant information regarding setting up and running a small business in the United States. It contains information and resources on starting a business, writing a business plan, preparing for expenses, exploring loans and how the bankruptcy process works.
University Of Denver Law School – Small Business Bankruptcy – This link guides you to the home page of the University of Denver Sturm College of Law Bankruptcy for Small Businesses page. The purpose of this page is to aid the public in researching bankruptcy law and related issues. It contains resources on getting started, chapter 7, 11 and 13 bankruptcy, and bankruptcy courts.
U.S. Bankruptcy Court – Southern Ohio – This is the primary site for the United States Bankruptcy Court for the Southern District of Ohio. It offers information on judges, financial education, frequently asked questions, general orders and Cincinnati bankruptcy news.U.S. Bankruptcy Court, 6th Circuit Court
221 E 4th Street # 800
Cincinnati, OH 45202-4120
Phone: (513) 684-2572
U.S. Bankruptcy Court – Western Kentucky – This is the home website for the United States Bankruptcy Court, Western District of Kentucky. The site contains resources and links on filing requirements, case information, fee information, FAQs, local rules and contact information.U.S. Bankruptcy Court – Western Kentucky
601 West Broadway, Suite 450
Louisville, KY 40202
Phone: (502) 627-5700
Steiden Law Offices | Covington Small Business Bankruptcy Attorney
If your business is currently dealing with unsustainable debt and you would like to figure out what your options are for the future, working with a qualified small business bankruptcy attorney will help you approach this complex situation efficiently. With a capable attorney at your side, the process will run much smoother and will allow you to work towards moving on with your life as opposed to worrying about the debt that is not getting any smaller.
Eric Steiden is a respected Kentucky and Ohio bankruptcy attorney who has spent the past 25 years helping Cincinnati, Florence, and Covington small businesses get out of debt and towards the next stage of their evolution. His commitment to using open communication, experience, and attention to detail can prove invaluable, even in the most complex small business insolvency situations.
To schedule a free consultation, call (888) 877-3328 or send an online message today. Steiden Law Offices proudly represents individuals and businesses throughout Northern Kentucky and Southern Ohio, including the Ohio cities of Cincinnati, Norwood and Forest Park, and the Kentucky cities of Florence, Covington, and Erlanger, among many others.