Economy Causes Businesses to File Chapter 7 Bankruptcy in Chicago

17-Nov-2010 It has been said recently that the economy is on an upswing. This is great news for may individuals as well as businesses. However a lot of the damage caused by the recession has already been done and many small businesses in Chicago have been forced to close their doors and file for bankruptcy.

For example, a small business that provides lawn care in the summer months and snow removal in the winter months may see a major decline in business. This type of service as well as house cleaning are often the first things to be cut when a household is going through a rough patch. If one family member has lost their job they are likely to take on more of the household chores that they used to outsource. This is wise planning on their part however during a recession a small lawn care business stands to lose a lot of their customers. Especially those that are able to do the work themselves but have hired help out of convenience. They are less likely to lose elderly customers who are unable to care for their own lawn or clean their own home. Once a business loses enough customers it may be forced to consider filing for bankruptcy.

When a business files for chapter 7 bankruptcy they are doing so with the knowledge that they do not plan to start their business back up again. This is because during the bankruptcy process every asset the business has will be liquidated into cash that will be used to pay of debts. Once the debts are paid and the assets are gone the business owner will be discharged of the debts.

If a business has been opened as a sole proprietorship it may make more sense to file chapter 13 bankruptcy. When you file chapter 13 bankruptcy you outline a plan to pay back your debts. Although you won't necessarily pay back the full amount you will show that you have the ability to continue making payments and do so until you are discharged of your debts. This can be especially important for the business owner who  has linked their personal assets with their professional assets. Filing chapter 13 will allow you to keep your personal assets.

We as individuals are being encouraged to spend money to stimulate the economy with the goal of breaking the recession. However if you've lost a job or are suffering with cut backs it is not easy to find extra money to spend. Until that can happen many small businesses will continue to require the assistance of qualified bankruptcy attorneys.

If you own a small business that is struggling contact a bankruptcy attorney right away to get advice on which type of bankruptcy will make the most sense for you.

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The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 866-790-8601 or Request a Free Legal Evaluation. Chang and Carlin serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.