Pelley Law Office LLP
Dallas Office
Plano Office
Sherman Office

No Charge For Initial Consultation ($250 value)

Menu Contact

Over 80 Years Of Combined Experience

View Our Practice Areas

Keeping a business after bankruptcy

When a small business owner chooses to file for bankruptcy in Texas, they may fear for the future of their business. Whether or not a business owner is able to keep their business after bankruptcy depends on the type of business they have and the type of bankruptcy they file for.

There are three primary bankruptcy choices for small business owners who cannot pay their bills. If the bills are personal, then a Chapter 7 or Chapter 13 bankruptcy is used to handle personal debts. The essential difference between these two is that Chapter 13 creates a repayment plan and Chapter 7 liquidates assets. If a business is a sole proprietorship, then the business is not affected by a Chapter 7 bankruptcy. Tools a person needs to do a job or conduct business are generally exempt from liquidation up to a certain dollar amount. This exemption will usually protect a sole proprietor and allow them to continue operating their business despite the bankruptcy.

If a business is considered a separate legal entity, then it is not included in a personal bankruptcy and must file separately. Partnerships, corporations and LLCs are all considered their own legal entities. If these businesses file for Chapter 7 bankruptcy, then they cease to exist because all business assets are liquidated. The only way to save such a business is to file for Chapter 11 bankruptcy. This is a business bankruptcy that creates a plan for debt repayment and allows the business to continue operating.

An attorney can assist a client in deciding which form of bankruptcy is best for a given situation. The attorney can also advise a client as to their rights during the bankruptcy and help them determine which assets may be exempt from liquidation. There are often many forms needed to file for bankruptcy, and an attorney can also assist with this filing.

Source: Houston Chronicle, "Can I Keep My Business If I File for Chapter 7 Bankruptcy?," August Jackson, Accessed Feb. 11, 2015

No Comments

Leave a comment
Comment Information

Awards & Recognition

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Locations

Plano office
Sherman office
Dallas office

Plano Office
1312 14th Street, Suite 100
Plano, Texas 75074

Phone: 972-608-0335
Map & Directions

Sherman Office
905 North Travis Street
Sherman, Texas 75090

Phone: 903-813-4778
Map & Directions

Dallas Office
100 Crescent Court
Suite 700
Dallas, Texas 75201

Phone: 214-733-1775
Map & Directions