Fayetteville Business Bankruptcy Attorneys

Name: Business Bankruptcy Attorneys in Fayetteville, AR | WH Law
Brand: WH Law

Restructure Debts & Renew Your Business’s Financial Security

Starting and running your own business is great. It’s exhilarating to build from the ground up and watch it grow. However, many end up straining under the weight of overwhelming debt or other financial issues.

During those times, remember that there are ways to help your business get back on its feet and give it another chance to succeed. One way is through business bankruptcy. It may be an intimidating idea, but when filed and followed correctly, it gives challenged businesses a fresh start.

At WH Law, we help companies all across Fayetteville and Northwest Arkansas with their bankruptcy filings. From initial consultation to court appearances and lender negotiations, we’re here to help.

More importantly, we’re here to listen. Reach out to us about your business. Our team is ready.

Why We Represent Fayetteville

It’s a Part of Us

First and foremost, WH Law is proud to help businesses in Fayetteville because our firm and many in our team are born-and-raised Arkansans. We shout “WOO-PIGSOOIE” at every Razorbacks game. We spend time with family around Lake Fayetteville, and catch a show at TheatreSquared when we can.

It’s a Dynamic Town, Full of Promise

Fayetteville is home to the U of A (or University of Arkansas to those from out of state), and is bustling with ambitious entrepreneurs looking to start and grow their businesses. That drive for success among small business owners and growing startups in the area is something we love to see. And at WH Law, we want to do everything we can to keep them going.

It’s Growing

At WH Law, we also know that Fayetteville is a thriving center for businesses. We even hear it’s earned a reputation as “The Startup City of the South.” That’s a huge deal, as it means Fayetteville businesses may be experiencing successful growth. Our team of business lawyers wants to support your company at every stage when it does.

The Difference Between Personal & Business Bankruptcy

There are enormous differences between individuals and businesses when it comes to filing bankruptcy. A business doesn’t get into the same kinds of debt as individuals. A Fayetteville resident will have different goals when filing for bankruptcy than a company would.

To prepare for a business bankruptcy filing, it helps to understand how personal and business bankruptcy differ. You can also rely on experts from a reputable Fayetteville bankruptcy law firm like WH Law. We assist in bankruptcy filings for businesses across Arkansas, and also provide a clear and concise breakdown for personal and business bankruptcy below:

Personal Bankruptcies

First, individuals file for personal bankruptcy. The purpose of this is so they can reorganize their debts and work toward returning their household to a state of financial stability. One big difference here is the kinds of debts that are involved:

Credit card debt
Medical Bills
Mortgages and personal loans
Lawsuits

Another key difference in personal bankruptcy are the Chapters that are commonly filed:

Chapter 7 – This involves liquidating household and individual assets, like real estate, vehicles, and belongings, to clear certain debts.
Chapter 13 – This involves an individual taking a course of rebuilding credit and managing finances, then setting up a repayment plan that they are ordered by the court to follow for three to five years.

The benefit of filing either of these kinds of bankruptcy as an individual is that they stop creditors from harassing you, prevent wage garnishments on your income, and halt the home foreclosure process.

Overall, personal bankruptcy helps individuals keep more of their property and income, and provides a measure of debt relief that makes it possible for them to move forward.

Additionally, if you are facing potential garnishments on your income in Fayetteville, wage garnishment attorneys from WH Law can help you find a solution and ensure you keep your income.

Business Bankruptcies

Business entities, such as an LLC, a corporation, or a partnership, file for business bankruptcy. In this type of bankruptcy, the goals are much different. Rather than rebuilding credit and relieving debts without losing all your assets, a business seeks to:

Restructure operations
Manage larger business debts
Sell off assets
Keep the company running or close it in an organized way

On top of having very different intentions with bankruptcy, the types that businesses will commonly file are also distinct:

Chapter 7: Similar to personal bankruptcies, except instead of liquidating personal belongings, the company sells off its business assets. Also, instead of discharging debts, the process ends with the company closing down.
Chapter 11: This allows the company to follow a reorganization plan under court supervision without losing all its assets. This is usually given to businesses that are having financial issues but have a strong potential to be profitable.

While larger companies often use Chapter 11 bankruptcy, Fayetteville businesses can too, especially with our help at WH Law. We’ve helped even small local businesses find their way to financial stability and profit. Call us for a free strategy session and learn how we can help you.

An Exception with Chapter 13

We should also add that there is a small exception to Chapter 13 for businesses. While LLCs and corporations can’t file for chapter 13 bankruptcies, individuals who are sole proprietors or single-member LLC owners can.

In this case, they’re able to file Chapter 13 so they can manage both their personal and business debts. However, you’re first required to be within the debt limits, which in this case are:

Unsecured debts below $526,700
Secured debts below $1,580,125

As long as your debts as a sole proprietor business are below those limits, you’re able to file Chapter 13 bankruptcy. So, for a small business bankruptcy, Arkansas companies can potentially take advantage of filing, especially with the help of our Fayetteville chapter 13 bankruptcy attorneys.

For Business Bankruptcy Lawyers, Fayetteville Can Trust WH Law

When your company is dealing with serious financial issues and you’re considering the bankruptcy process, talk to WH Law. Our team of experienced bankruptcy lawyers has provided clear, insightful guidance in debt relief for businesses. Fayetteville companies can book a free consultation and learn how our expert bankruptcy lawyers can help make the process as smooth as possible.

Reach out to WH Law, because we’re ready to listen.

Schedule Your Free Strategy Session

Have a quick question? Call or Text us!

Fayetteville Business Bankruptcy FAQs

Should I file Chapter 7 or Chapter 11 for my business?
This largely depends on whether your business can continue operating. Let’s break down when a company should file Chapter 7 or Chapter 11:
- Chapter 7 should be filed for businesses that have no choice but to shut down or are insolvent. This means they are unable to pay their debts, or the total cost of their debts are far above the value of their company’s assets.
If your company cannot continue to operate financially, consider filing for bankruptcy with the help of experienced Fayetteville Chapter 7 bankruptcy attorneys from WH Law. On the other hand, when a business can, they should file Chapter 11.
- Chapter 11 is for businesses that can continue to fund their operations and have a reasonable chance of producing a profit, but that also face financial strains and need relief. By proving that complex debt issues can be resolved through restructuring debts and fixing their organization, Chapter 11 can serve as a viable way for struggling businesses to get back on track.
Can a small business file Chapter 13 bankruptcy?

Yes, but only under one specific circumstance: The small business in question must be owned and controlled by a sole proprietor or a single-member LLC. This way, the court will see that all debts are made out to one single legal entity.

This means the filing business must also be within the debt limits of $526,700 of unsecured debt and $1,580,125 of secured debt.
Could a bankruptcy filing help save my business?

It depends on whether your business can continue to operate and probably has the potential to repay its debts in the future. In that case, you can file for Chapter 11 bankruptcy, which requires your business to follow a reorganization plan under the supervision of the court.

However, the benefit of following this plan is that it helps you restructure debt payments, renegotiate leases and contracts, and place an automatic stay on collections, foreclosures, lawsuits, and repossessions.

This gives your company some breathing room to restructure and work out a way to fix your financial issues, all while continuing to operate and generate revenue.
What happens to my employees if I file for bankruptcy?

Under a Chapter 7 bankruptcy, your employees will have to be laid off, as the end result will be the company shutting down.

Under a Chapter 11 bankruptcy, there is a chance to keep your employees around while reorganizing your business to ensure you pay back your debts. However, many companies tend to downsize to make their operations more efficient under the circumstances.
Do I lose everything if my business files for bankruptcy?

Not in every case. Companies filing Chapter 11 often retain a number of assets to continue operating, following a strict repayment plan under court approval.

However, when filing under Chapter 7, a business will likely have its assets turned over to a court-appointed trustee, who will sell off the business’s assets in order to pay off its debts.