• Indiana is home to more than 500,000 small businesses.
• In recent years, there has been a 25% annual increase in the number of small business bankruptcies filed in the state.
• 90% of small business loans in Indiana are personally guaranteed by the owners.

Note: Even if personal assets are not required as collateral for business loans or for lines of credit, creditors relay heavily on owners' credit scores.

It depends:
…Are your business loans or lines of credit guaranteed by personal assets?
…Did you put personal money into your business, including home equity lines of credit?
…Have you withdrawn money from your business for personal use?
…Were all contracts and agreements signed only in the name of the business?

MYTH: If a business is held in the form of a corporation, partnership, or limited liability company (LLC), the business is a separate legal entity from its owners and can file bankruptcy in its own right.

FACT: The majority of small business owners never kept "the veil" intact, By intermingling business and personal finances, they make it possible for creditors to "pierce" the corporate veil.

Moody's Investor Services lists three early warning signs of corporate bankruptcy:

• Limited cash reserves for a rainy day
• A lot of debt
• Large payments due over the next year

CHAPTER 7 - LIQUIDATION
When it is clear the business cannot survive, Chapter 7 small business bankruptcy provides for an orderly liquidation of the business under the direction of a bankruptcy trustee. Shareholders have no costs, and collection efforts are halted through the bankruptcy Automatic Stay.

CHAPTER 11 - A CONTINUING PROCESS
Despite the fact that the business is suffering severe financial difficulties, there is a good possibility it can survive if debt repayments can be reduced or postponed. Business owners remain in control as "debtors in possession", serving as "fiduciaries" for the creditors.

Meanwhile, unsecured creditors form a committee to help work out a compromise debt repayment plan under bankruptcy court supervision.

Not ready to consider small business bankruptcy? Our experienced attorneys offer consulting to help prioritize payment of expenses including taxes, rent, utilities, payroll and suppliers, and negotiate with creditors.

With close to twenty-five years helping small business owners, we know:
BANKRUPTCY IS A VERY BITTER PILL FOR ANY BUSINESS OWNER TO SWALLOW!
Our mission is to help you evaluate all available options and make the decisions best for you and your small business.