Bankruptcy & Small Business
By Cathy Moran, California Bankruptcy Lawyer on Feb 8, 2007 in General Bankruptcy Information
For purposes of the law, the sole proprietorship business is one and the same as the individual who owns the business. Often proprietors inquire if they can file bankruptcy “just for the business debts”, or sometimes, just for their personal debts. The answer is NO, because the business and the individual are one and the same, and bankruptcy does not let the debtor pick and choose which debts to include.
For this reason, Chapter 13 is frequently the best choice of chapter for the entrepreneur who wants to continue running the business. In Chapter 13, the debtor remains in possession and control of his assets, including the business, and makes payments on his universe of debts through his Chapter 13 plan.
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