Business owners can use Subchapter V to protect their homes

| Dec 27, 2020 | Bankruptcy, Business Law, Chapter 11, small business reorganization, subchapter v, Uncategorized

As a business owner, have you taken out a Home Equity Loan to help start your business? Have you used a Home Equity Line of Credit to expand your business? Have you used personal credit cards to buy supplies or equipment for your business? Has your business landlord or a key supplier required you to sign a personal guarantee?

Everyone knows that  you are “not supposed to be personally liable” for business debts if you set up a corporation or Limited Liability Company. But the reality is, if your really want your business to open, or to thrive, you will be faced with critical decisions on multiple occasions: “Do I sign that Personal Guaranty, or do I close the business?

Having invested your savings and your time, your instincts will usually say “take the risk or I will lose all I have put into this business”; or “If I close this business I will never be able to support my family.”

We are now faced with a crisis: most business owners are personally liable for key debts. If the business does not make required payments, the owners will get sued. This sometimes means collection lawsuits, but most significantly, it could be a foreclosure on your home.

How can you get protection at the time it is most needed? Paul Hollender, Board Certified Bankruptcy Attorney can help

The Small Business Reorganization Act (Subchapter V of Chapter 11) provides a special benefit for the owners of the business, in addition to helping the business itself.

The business can file for protection under Subchapter V of Chapter 11 of the Bankruptcy Code for a fast-track, small business mini-reorganization. Much less expensive than a classic Chapter 11 case, this provides shelter for your business. But the business bankruptcy reorganization filing  does not protect you personally.  In fact, the reason you were required to sign that personal guarantee, of use your personal credit cards or home equity line of credit, is to protect your creditor from the risk that your company may close or file for bankruptcy.  That puts you and your family at risk:  the last thing you ever envisioned.

It is now possible to file for personal Subchapter V case to hold off your “guarantee” creditors and personal creditors, and protect your personal residence, if we can establish your eligibility for subchapter V.

This is a job for an an attorney recognized by his peers as a top attorney in his field Paul Hollender SuperLawyers-Metro – selected year after year

Every situation is unique. Call 718-442-4424  or [email protected] for a personalized options evaluation. Day or Evening. In person, Telephonic, Zoom.

FindLaw Network