Chapter 7 Bankruptcy for Sole Proprietors in Minneapolis

When your debt becomes too much to manage, Chapter 7 bankruptcy for sole proprietors in Minneapolis could help. Unlike corporations and limited liability companies (LLCs), sole proprietors are personally responsible for business debts. That means business failure often affects your personal finances. Our experienced Chapter 7 bankruptcy attorneys at Walker & Walker could help you resolve debt and move forward with your life.

What Chapter 7 Does for Sole Proprietors

A sole proprietor is someone who operates a small business under their own name or a DBA (doing business as). This means there is no legal distinction between the business and the individual. If you report business income and expenses on your personal tax return, you are personally liable for business debts.

Filing Chapter 7 allows you to eliminate both business and personal unsecured debt. This includes:

• Business credit cards
• Personal loans used for business
• Vendor bills
• Medical bills or credit cards unrelated to the business

Minneapolis sole proprietors can use Chapter 7 bankruptcy to have qualifying debts discharged, which is not available to business entities such as LLCs or corporations.

When Is Chapter 7 a Good Choice?

Filing for bankruptcy may be a difficult decision, and it certainly is not always the right one. But if your income cannot cover your living expenses and business debt payments, it is time to consider it. Seeking Chapter 7 may be the right choice for you if:

• Creditors are threatening to sue
• You are already being sued for unpaid business debts
• Business revenue has dropped permanently
• You are using personal credit to keep the business going
• You have already tried to renegotiate debts or reduce expenses

One major benefit of Chapter 7 debt relief for sole proprietors in Minneapolis is the automatic stay. From the moment you file, all lawsuits, wage garnishments, bank levies, and collection activity stops. You also get to keep exempt assets such as your home, car, retirement accounts, and other necessary possessions. We could help you understand what assets you can protect under the state’s exemption laws.

The Chapter 7 Process

Filing for Chapter 7 bankruptcy as a Minneapolis sole proprietor is similar to a personal bankruptcy. However, it involves a more detailed review of your business finances. We begin with an evaluation of your finances and then prepare and file all documents with the court. At that point, the automatic stay starts. You will have a brief hearing, during which the trustee will ask about your finances and determine if any non-exempt property can be sold. After 90 days, your eligible debts will be eliminated and the case will be closed.

Recovering After Chapter 7

Many sole proprietors in Minneapolis worry about how Chapter 7 bankruptcy will affect their credit and future ability to start a business. Following Chapter 7, we could help you remove inaccurate or harmful items from your credit reports. If creditors or credit bureaus violate your rights, we could pursue claims. You may qualify for new credit within 12 to 18 months, and you are not barred from starting a new business in the future.

Speak With a Minneapolis Attorney To Learn How Chapter 7 Bankruptcy Works for Sole Proprietors

Chapter 7 bankruptcy for sole proprietors in Minneapolis could be the legal and financial reset you need to take control of your finances. If you are operating a business and struggling with the weight of both personal and business debt, our attorneys could help. For over 40 years, Walker & Walker has supported business owners facing financial crises. With seven office locations, we are available to guide you through this difficult situation. We know that Chapter 7 bankruptcy is not a decision to be made lightly, but it can be a powerful solution.

Contact us today or visit our website to schedule a free consultation. Let us help you decide if filing Chapter 7 is the best option for your situation.