Starting, managing, and expanding a small business is a challenging matter in today’s economy. No matter how hard you have worked, you may have accrued unmanageable debts that threaten the survival of your enterprise. This is a stressful turn of events and one in which you may feel that all hope is lost. However, The Law Offices of Joshua Cavanaugh may have the solutions you need to help restore you to financial control. 

Attorney Joshua Cavanaugh has been helping individuals as well as business owners reorganize their debt or obtain legal debt discharges through appropriate bankruptcy filings. You may believe bankruptcy is an indicator of failure but that stigma does not have to apply. By taking advantage of bankruptcy options provided by law, you may be able to recover and rebuild your business into the thriving company you have always envisioned. 


Filing for bankruptcy puts your business under the protection of the bankruptcy court which immediately issues an “automatic stay.” This is a court order that prohibits your creditors from taking any further collection actions against you, such as lawsuits. Once your bankruptcy case is completed, the debts you have listed in the filing will be discharged. This will likely affect your business in terms of acquiring new credit. However, it can still give you the fresh start you need. 

If you are unable to satisfy your current debts or need time to reorganize them into a manageable payment, you generally have two options. 

These consist of:

  • Chapter 7 liquidation bankruptcy. This may be the best option if you are facing creditor actions such as repossession of assets (inventory, cash, tools, equipment, vehicles, etc.) or foreclosure and wish to close the business. This will end creditor harassment. 
  • Chapter 13 reorganization plan. If you are a sole proprietor, you are commonly responsible for business debt including business tax debt. In a Chapter 13 filing, you can create a payment plan under your name that will pay off your business and/or personal debts over a three to five-year period. This type of bankruptcy allows you to keep your tools of the trade up to a specific monetary value. You may also keep assets that are non-exempt (unprotected by bankruptcy) by restructuring those debts into the payment plan. At the end of this period, whatever debts remain will be discharged. 

As a small business owner, filing for bankruptcy is a complicated prospect in terms of assessing what type of filing best suits your needs as well as how to prepare and manage your case through the courts. If you need to address overwhelming debt as a small business owner, the best action you can take is to discuss your circumstances with a Katy small business bankruptcy attorney at The Law Offices of Joshua Cavanaugh. Joshua is well-versed in the laws that will apply to your situation as well as the operation and practices of the bankruptcy court.