According to statistics from the United States Bankruptcy Court, District of Nevada, there were about 1,168 bankruptcy filings in Reno, Nevada in 2020. Unfortunately, business closedowns throughout the United States following the coronavirus outbreak in 2020 have affected a lot of small businesses in the country. If your business is struggling financially due to the pandemic or other issues have led to struggles with debt, filing for bankruptcy may be an option that could provide some relief.
For over four decades, Scott N. Tisevich, Attorney at Law, has been offering experienced legal guidance to small business owners across Reno, Nevada and the surrounding areas in a variety of bankruptcy-related matters. Attorney Scott N. Tisevich is available to discuss your personal situation and explore your small business bankruptcy options. As a knowledgeable Nevada bankruptcy attorney, he can offer you the comprehensive legal counsel and advocacy you need to navigate key decisions in your bankruptcy case.
The Law Office of Scott N. Tisevich proudly serves clients throughout Reno, Nevada, and the surrounding areas of Carson City, Douglas County, Lyon County, Las Vegas, and Churchill County.
Seeing your business struggle after you’ve spent years building it through hard work, dedication, and passion can be heartbreaking. Unfortunately, this has been the case for many small business owners following the coronavirus pandemic in 2020. During these difficult times, business owners can actually find debt relief and get the needed time to restructure their business by filing for bankruptcy. However, you may need to consider several different factors before choosing the right bankruptcy chapter that best fits your unique situation.
An important factor to consider when considering bankruptcy is the legal structure of your business. Generally speaking, there are three common classifications that describe most small business enterprises: a sole proprietorship, a partnership, and a limited liability company (LLC). Each structure can be defined as follows:
Sole Proprietorship - The business owner has total control over the business. He receives all profits and pays taxes. Unfortunately, both the sole proprietor's personal properties and business assets will be exposed to liability.
Partnership - A partnership is a business association involving two or more persons who serve as co-owners of the business. Partners will be held accountable for the liabilities, debts, and actions of the partnership.
Limited Liability Companies (LLC) - The LLC provides corporate protection to its members. Should the company incur debts, LLC members will not be personally liable.
Another factor to consider to help determine the ideal bankruptcy option for your small business is the plan you have for the business going forward. Do you want to liquidate and close the business totally? Will you like to keep the business going while you rebuild? Would you like to continue or suspend business operations? Your answers to these questions will help determine the right bankruptcy option for you.
As mentioned earlier, your business structure and plan going forward will help determine the bankruptcy chapter that will best suit your needs. The available bankruptcy options to business owners include Chapter 7, Chapter 11, and Chapter 13 bankruptcy.
Chapter 7 bankruptcy, often referred to as "liquidation" bankruptcy, helps individuals and small businesses eliminate most of their general unsecured debts and get a needed financial fresh start. In a sole proprietorship, the business owner (sole proprietor) and his business will be treated as a single entity. Thus, sole proprietors can discharge some of their unsecured debts by filing for Chapter 7 bankruptcy in their name.
Alternatively, partnerships and LLCs do not allow debt discharge. This is why most partnerships and LLCs do not file for Chapter 7 bankruptcy.
Chapter 11 bankruptcy, often referred to as "reorganization" bankruptcy, helps businesses reorganize their affairs, properties, and debts. This type of bankruptcy also allows debtors to propose a repayment plan while they keep the business afloat. Chapter 11 bankruptcy is often suited to work well with both partnerships and LLCs.
However, filing for Chapter 11 bankruptcy can be a lengthy, time-consuming, and expensive process. Both the court and the debtors may also be required to approve the proposed repayment plan.
Chapter 13 bankruptcy, often referred to as a "wage earner's plan,” allows individuals and small business owners with regular income to create a plan to reorganize and repay all or part of their debts across a three- to five-year period. Chapter 13 bankruptcy is only available to sole proprietors who wish to file as an individual.
In Chapter 13 bankruptcy, there is no direct contact between the debtor (business owner) and creditors. This bankruptcy option also allows for the discharge of various kinds of debts. However, the business owner will have to divert all disposable income into the repayment plan. The business owner will report to the trustee, who then distributes all subsequent payments to the creditors.
Filing for small business bankruptcy in Nevada often involves a lot of legal complexities. For this reason, it is never advisable to navigate the bankruptcy process on your own. If you or someone you know is considering bankruptcy during these uncertain times, it is important that you consult with a knowledgeable Nevada bankruptcy attorney for legal guidance you can trust.
Attorney Scott N. Tisevich has devoted his career to guiding small business owners through the complicated process of filing for bankruptcy. As your legal counsel, he will assess the intricate details of your personal situation and recommend the ideal bankruptcy option for you or your business. He can also help you file your forms, represent you through any court proceedings, and negotiate with creditors on your behalf to establish a repayment plan that works for you. No matter how insurmountable your debt may seem, the Law Office of Scott N. Tisevich is proud to offer reliable legal guidance at every turn so that you can navigate your bankruptcy case and work toward a more stable financial future.
Filing for small business bankruptcy is a major decision that requires thorough evaluation and proper guidance. If you are experiencing financial hardship and are considering filing for bankruptcy, call Scott N. Tisevich, Attorney at Law, today to schedule a one-on-one case assessment. Attorney Scott N. Tisevich can offer you the comprehensive legal counsel and advocacy you need to achieve the fresh start you deserve. He is also proud to serve clients across Reno, Carson City, Douglas County, Lyon County, Las Vegas, and Churchill County, Nevada. Call or reach out today to get the help you need!