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Small Businesses: Choosing Debt Relief or Bankruptcy!

Choose Bankruptcy or Debt Relief For Your Business?

To answer this question, you have to know what has caused the problems the business now faces and what are the prospects for change. If your business is in trouble, how do you determine if bankruptcy or debt relief is necessary or helpful for your situation?

Is the business a corporation, a partnership, or a proprietorship?

  • Corporations, limited liability companies (LLC) and partnerships are legal entities separate from their shareholders or partners. They can file Chapter 7 or Chapter 11 bankruptcy in their own right.
  • Proprietorships are just an extension of the business owner. They can’t file bankruptcy alone. The proprietor must file bankruptcy since the assets and the liabilities of the business are really considered one of the assets of the proprietor. The individual owner may file Chapter 7, Chapter 11 or Chapter 13, if certain qualifications apply.

Should the business be reorganized or liquidated?

To answer this question, you have to know what has caused the problems the business now faces and what are the prospects for change:

  • Reorganization can’t create a market, increase gross revenue, or make up for a poor fit between the skills available and the skills required to run the business. However, reorganization could free up cash from servicing the old debt to permit current operations, permit rejection of expensive leases or contracts that are no longer advantageous or prevent the loss of vital assets or cash to creditor collection actions.

Business bankruptcy or debt reliefIn between Chapter 7 liquidation and reorganization, a liquidating Chapter 13 or Chapter 11 could provide a breathing space for the owners to sell the business or its assets in something other than a “going out of business” sale. The funds acquired could pay taxes or unpaid salaries. Sale of the business could provide ongoing jobs for the work force under new ownership. The bankruptcy could then be converted to Chapter 7 or dismissed all together if the protection is no longer needed, conditional to all sale proceeds being paid to outstanding creditors.

To better understand all your options, please feel free to call PCS Debt Relief today and find out which is best for you. Bankruptcy can be the cause of closing your doors, but with debt relief and debt negotiations, you can still keep your business running and just deal with your debt. PCS Debt Relief can handle your debt while you focus on running your business.

PCS Debt Relief is not a law firm, and does not provide legal counseling. If PCS believes bankruptcy may be the best solution for you after analyzing your situation, your debt analyst will refer you to an attorney to receive legal counseling.

PCS Debt Relief

About the Author:

At PCS, our programs are tailored to the client’s specific financial needs. What sets us apart from our competitors is that clients see relief, before any payment is received. Our NO UP-FRONT FEE policy ensures our client’s a 100% satisfaction guarantee. We also do not charge any monthly fees or any cancellation fees. We want the client to feel comfortable during the whole process that’s why we allow them to be part of it every step of the way.


  1. Tonya July 27, 2014 at 8:39 pm - Reply

    Thanks for your patience, hard work and perseverance without this staff I wouldn’t still own my business!

    • PCS Debt Relief July 28, 2014 at 10:45 am - Reply

      Thanks for the kind words Tonya, we are determined to help people. That’s how we became the leader in the debt relief industry and the most trusted. Enjoy your week and if you need anything please don’t hesitate to give us a call.

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