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Gawker Files for Bankruptcy, Plans Auction and Resurrection

Gawker, the audacious upstart media company that lost a privacy trial to Hulk Hogan in Florida recently, is paying heavily for its audacity. Today it formally filed for bankruptcy and is entertaining offers from prospective buyers, reports Recode.

But don't wave goodbye to Gawker yet, as it is still a feisty company, and this is not clearly a sign of defeat. In fact it's a sign of more fight. Although it announced its intention to file for Chapter 11, the company's owner Nick Denton said that he intends to continue to publish and to fight the legal battle against Hulk Hogan, sponsored by billionaire Peter Thiel.

3 Tips to Avoid Small Business Bankruptcy

The last thing you imagined doing when you started your business is going bankrupt. Obviously, you were aiming much higher, and you're a survivor, and you would like to avoid making this particular dreaded declaration.

So what can you do? Let's take a look at what exactly bankruptcy is and three steps you can take to avoid it.

What Is Bankruptcy?

There are multiple types of bankruptcies, and you may be familiar with the terms associated with the most common of them, Chapter 7 and Chapter 13. But generally speaking bankruptcy is a federal court procedure that helps consumers and businesses to either liquidate or reorganize, clear debts, and pay off creditors.

People always complain how hard it is to achieve a good work-life balance, and to keep business and personal matters separate. At no time is that more true than when your small business gets sued. All of a sudden you're wondering what you could lose if your business loses the lawsuit.

Depending on the corporate structure of your small business, you could be personally liable for business debts, including legal judgments. Which means they could come for your home, unless you take the proper precautions to protect your home in a business lawsuit.

Most small business owners structure their companies and ownership interests so that the debts of the business don't become the debts of the owner. (We're looking at you, sole proprietors.) But what if the shoe is on the other foot? Could your personal debt or bankruptcy filing drag your business down?

For entrepreneurs that already put too much of themselves into their business, it might be nice to know that personal debt isn't one of those things. So here are some protections that businesses have against the personal debt of their owners.

Let's face it -- not every small business is going to make it. And those that don't can normally claim some protection in bankruptcy, if necessary. Well, those that also don't sell marijuana, that is.

The Tenth Circuit recently held that debtors in the marijuana business can't obtain relief in federal bankruptcy court. Here's why:

Entrepreneurs are an optimistic sort, so it may be hard to admit that your small business needs to file for bankruptcy. But even the best of us go bankrupt, just ask 50 Cent, Kodak, and the company that makes Twinkies.

There are a few options for small business bankruptcy, and here's what you can expect if you file for Chapter 11 or "reorganization" bankruptcy.

Colt Defense, LLC, one of America's oldest and most storied companies, filed for bankruptcy this week. It seems impossible that such a historic brand (and a gun manufacturer in America at that) could go bankrupt, but bidders weren't exactly chomping at the bit for the company when it went up for auction.

If it can happen to Colt, it could happen to you. So what can small business owners learn from the legendary gun maker's mistakes? Here are 3 lessons:

When the debts start piling up, you may have to consider bankruptcy.

Bankruptcy may sound appealing. You get the creditors off your back and your debts discharged. Sure, it destroys your credit, but that can be rebuilt. However, what about your business?

What can happen to your business if you file for bankruptcy?

Say it ain't so! SkyMall, the ubiquitous in-flight shopping catalog, filed for bankruptcy protection Friday. While seat-back pockets will never be the same, the company's ordeal offers some legal lessons for business owners.

SkyMall's parent company, Phoenix-based Xhibit Corp., "suspended its retail catalog operations" last week, Reuters reports. Staff layoffs, meetings with creditors, and court hearings are on the itinerary as the company makes its way through the bankruptcy process.

What can small business owners learn from SkyMall's bankruptcy filing? Here are five takeaways:

Which Debts Can Be Discharged in a Business Bankruptcy?

If your business is falling hopelessly behind on paying its bills, filing for bankruptcy may be the best option for getting rid of your business' debts.

But which debts are discharged in a bankruptcy? And maybe more importantly, which debts aren't?