Are you considering bankruptcy but wondering how it might affect your family business? If so, you’re not alone. Many small business owners find themselves in a position where they need to file for bankruptcy but are worried about the impact it will have on their company. In this blog post, we’ll explore how filing for bankruptcy can affect your family business and provide helpful information to ease your worries.
Membership or Shares in the Family Business
When you file for bankruptcy, the first thing that is considered is your assets. It’s important to note that your LLC or corporation must only file for bankruptcy if it’s also experiencing financial difficulties. However, the value of your membership or shares in the corporation will be considered. The bankruptcy law protects your assets, so there are limits to what can be taken or seized by creditors. This is where your membership or shares in the family business come into play.
Value of Your Membership or Shares
If the membership or shares do not have enough value to a trustee, they will not be at risk of bankruptcy. That said, it’s important to have a professional look closely at the value of your ownership interest in the LLC or Corporation, as this is what the trustee will assess. In many cases, your membership or shares may not be worth enough to be at risk of bankruptcy. In assessing the value of your ownership interest in the LLC or corporation, you should contact a professional with experience in bankruptcy law. They can help you determine whether your family business is at risk and guide you on the right path forward. They’ll discuss the valuation of your membership or shares and whether you need to take action to protect them.
Bankruptcy Often Does Not Impact Your Ownership Interest
In most cases, you can file for bankruptcy without impacting your ownership interest in the family business. For example, in a recent client’s case, we found that his portion of the family LLC wasn’t worth enough to be at risk of bankruptcy. He could file for Chapter 7 bankruptcy to eliminate his credit card, medical, and vehicle repo debts while keeping his ownership interest in the family LLC. In this way, bankruptcy could give Kyle the fresh start he needed while preserving his ownership status.
If you’re considering filing for bankruptcy and worried about how it might impact your family business, there’s no need to fret. While your membership or shares in the LLC or Corporation will be taken into account, they may not be at risk. By working with a professional experienced in bankruptcy law, you can determine the value of your interest and whether it will be impacted. In most cases, you can file for bankruptcy and keep your family business intact. So, don’t let the fear of default keep you from getting a fresh financial start. Consult with a professional and get the help you need.
Contact the Bankruptcy Attorneys at OlsenDaines Today
From our free bankruptcy consultations to our complimentary credit rebuilding program, bankruptcy attorneys at OlsenDaines are here to help you with every step of the bankruptcy process. We are the largest and most experienced consumer bankruptcy law firm in the Pacific NW, with convenient offices throughout Oregon and Washington. We can address your financial difficulties with the expertise and careful planning you are seeking. Contact us today to schedule your free bankruptcy consultation.