Can a Small Business Owner File For Bankruptcy?

Many small business owners experience hardships due to changes in the economy, their clients’ spending habits and more. And they may not be aware that their unsecured debts can be wiped out while keeping their business.

Lee Abt has been filing bankruptcies for small businesses for over 30 years. These are often not Chapter 11 reorganizations, but rather Chapter 7’s and 13’s. Often these cases are not for the business itself, but for the individual who owns the sole proprietorship or small company.

In almost all cases where the owner files a personal bankruptcy, the business can stay open if the owner chooses to keep the business open.

In a personal bankruptcy the debtor/owner would typically discharge debt if the owner is personally liable. This often allows the owner to emerge debt-free and therefore better able to succeed in the business.