When most people in Maryland think about Chapter 7 bankruptcy, they only consider the benefits that are available to individuals who are looking to eliminate personal debt. Chapter 7 is also a powerful tool for certain business owners, and it gives some the chance to combine a personal and business bankruptcy into one process. Individuals who are sole proprietors of their enterprises should take the time to understand how Chapter 7 bankruptcy protection could work for their unique sets of circumstances.
Often, small business owners have little separation between their personal and business finances. When times are tough, many will tap into their own savings to fund a struggling business venture. In some cases, this effort does not yield the desired results, and the business ultimately fails. The owner can be left in serious financial distress, having put all of his or her financial eggs into one basket, so to speak.
Relief can come in the form of a Chapter 7 bankruptcy filing. Bankruptcy law recognizes the degree to which sole proprietors put a personal financial stake in their business ventures. As a result, it is possible for small business owners to combine their personal and financial debt into one filing.
Each and every set of circumstances is unique. There is no such thing as a one-size-fits-all bankruptcy solution. Business owners in Maryland who are considering bankruptcy should take the time to consult with an attorney about the power of Chapter 7 bankruptcy protection and learn whether such a move could provide a solution to financial woes.
Source: business2community.com, "4 Options You Should Know When Your Small Business Fails", Dec. 3, 2015