Chapter 13 Bankruptcy for Sole Proprietors in Minneapolis

If you run a business as a sole proprietor, your personal and business finances are connected. This means creditors can pursue both personal and business assets if your business struggles with debt, faces lawsuits, or owes back taxes. Chapter 13 bankruptcy can help sole proprietors in Minneapolis reorganize debt while keeping their business running. With the guidance of an experienced Chapter 13 bankruptcy attorney from Walker & Walker, you can create a plan to repay debts over time and work toward a more stable financial future.

How Do Sole Proprietorships Differ From Other Business Entities?

Corporations and limited liability companies (LLCs) are separate legal entities from the people who own them, a corporation’s shareholders, and an LLC’s members. Generally, the personal assets of owners are shielded from the business’s creditors and lawsuits because of this status. Sole proprietorships are not separate from the owner’s personal assets, which means creditors and prevailing plaintiffs can access your personal and business assets to satisfy your debts. As a sole proprietor in Minneapolis, you could shield yourself from this happening by filing Chapter 13 bankruptcy.

Restructuring Your Personal and Business Debt Under Chapter 13

Utilizing Chapter 13 allows you to restructure both your business and personal debt in one petition. You can typically file Chapter 13 if you have a steady income, which can be from:

• A salary you take from your business
• A job separate from your business
• Social Security, including disability payments
• A spouse’s income, whether or not they are filing bankruptcy with you
• Alimony and child support you receive
• Retirement income

Note that there are limits to the amount of debt you can have prior to submitting the petition. The benefit of Chapter 13 is that you can save your home from foreclosure and reduce your monthly personal and business debt load by making payments you can afford. You can keep your Minneapolis sole proprietorship open throughout Chapter 13 bankruptcy, allowing it to generate money while a trustee oversees the process. Our attorneys guide you through filing your petition, completing credit counseling, and preparing a repayment plan that works for your situation.

Sole Proprietors Retain Assets

With Chapter 13, you can keep your personal and business assets while reorganizing your debts. You make payments to creditors over three to five years, and once you complete your repayment plan, the remaining qualifying debt may be discharged. You will use your disposable income to make these payments, so it’s important to plan carefully for additional personal or business expenses. If unexpected costs arise, your attorney can help you work with the trustee to address them responsibly.

Contact a Minneapolis Lawyer To Learn How Chapter 13 Bankruptcy Works for Sole Proprietors

As a sole proprietor, your personal and business assets are treated as one, which means creditors and tax authorities can pursue both. If debt is affecting your business and personal life, Chapter 13 bankruptcy may allow you to reorganize your debts, reduce your monthly payments, and protect your assets.

Chapter 13 for sole proprietors in Minneapolis can help you take control of your finances and keep your business running. Schedule a free consultation with our bankruptcy attorneys at Walker & Walker to review your situation and explore the options available to you.