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Chapter 7 Bankruptcy for Businesses

Los Angeles Chapter 7 Business Bankruptcy Lawyer

Over 20 Years & 7,500+ Cases: Chapter 7 Bankruptcy for L.A. Business Owners

If you’re a small business owner facing mounting debt and cash flow problems, RHM LAW LLP can help you find a path forward. With over 20 years of experience and more than 7,500 bankruptcy cases filed or overseen in the Los Angeles area, we’ve guided business owners through Chapter 7 and other debt relief options across a wide range of industries and entity structures.

Many of the business owners we’ve worked with have been able to keep their businesses. In those cases, bankruptcy addressed qualifying debts while protecting personal property, giving them financial breathing room to put their businesses on solid ground.

To schedule a 30-minute complimentary consultation, contact our Los Angeles Chapter 7 bankruptcy attorneys today. RHM LAW LLP wants to help you take control of your financial future.

Key Advantages of Chapter 7 Debt Relief for Business Owners

In a 30-minute complimentary consultation, an attorney at RHM LAW LLP can review your financial situation and recommend an appropriate option. For some small business owners, that means filing as an individual under Chapter 13. For others, a Chapter 7 filing may be the right path.

One of the most immediate benefits of filing is the automatic stay, a federal court order that takes effect the moment a bankruptcy petition is filed. The automatic stay prohibits creditors from initiating or continuing collection actions, including wage garnishments, repossessions, and lawsuits that may be actively disrupting your daily operations. For Los Angeles business owners dealing with aggressive creditors, this protection can provide critical relief quickly.

Beyond halting collection actions, Chapter 7 may allow qualifying debts to be eliminated, including:

  • Back rent on commercial or personal property
  • Debts to suppliers and vendors accumulated during operations
  • Personal loans used to fund the business
  • Repossession and creditor harassment actions that may stop upon filing

Chapter 7 also carries real risks, particularly for businesses structured as LLCs or corporations. Our attorneys can help you weigh those risks and determine whether Chapter 7, or another chapter, is the right fit for your situation.

How Business Entity Type Affects Chapter 7 Outcomes

The most important factor shaping a business Chapter 7 case is how the business is structured legally. Sole proprietors, LLCs, and corporations face different rules and different outcomes, and understanding those distinctions before filing can change which path makes the most sense.

Sole Proprietors

A sole proprietor and the business are legally the same entity. Filing Chapter 7 as an individual addresses both personal and business debts in a single case, and a sole proprietor may be able to continue operating after filing if business assets are protected by applicable California bankruptcy exemptions or if there are no significant non-exempt business assets.

LLCs & Corporations

Under federal bankruptcy law, corporations and LLCs that file Chapter 7 don’t receive a discharge of debts. Instead, the court appoints a trustee to sell business assets, pay creditors in priority order, and close the entity. Because no discharge is issued, many business owners find it more practical to file a personal Chapter 7 or Chapter 13 to address their individual liability for company debts, especially where personal guarantees are involved. Business owners who signed personal guarantees on company obligations may still face personal exposure after a corporate Chapter 7, and a separate personal filing may be necessary to address those obligations.

When Business Chapter 7 Makes Sense

Entity-level Chapter 7 can still be the right choice when there are assets to liquidate in an orderly way, when the owner wants to manage personal exposure from the winding-down process, or when the goal is simply to notify creditors that the business is no longer operating. When the goal is to keep the business running and restructure its debts, Chapter 11 or Subchapter V of Chapter 11 is generally the more appropriate path.

RHM LAW LLP handles Chapter 7, 11, 13, and 20 bankruptcies and works with sole owners, limited partnership members, and principal shareholders in small businesses throughout the Los Angeles area. We can assess which chapter fits your entity structure and goals before you file anything.

Will I Be Able to Keep My Business After Filing for Chapter 7?

Each business bankruptcy is different. In LLC and corporate filings, the court will typically appoint a trustee to liquidate the business’s assets, effectively closing the entity. For sole proprietors and individual filers, the business owner may be able to retain control of assets and continue operating. Whether Chapter 7 or a personal filing under another chapter is the better route depends on your entity type, the nature of your debts, and what you want to accomplish.

Our Chapter 7 bankruptcy attorneys can examine your situation and walk you through your options. We can do everything possible to help you keep your business.

Why Los Angeles Business Owners Choose RHM LAW LLP for Chapter 7

Our Los Angeles Chapter 7 bankruptcy attorneys have worked with businesses of many types. Whether you’re a sole owner, a member of a limited partnership, or a principal shareholder in a small business, we provide the advice and representation suited to your specific situation. Consultations are available in English, Spanish, and Farsi, reflecting the diverse small-business communities we serve across Los Angeles and the San Fernando Valley. Same-day and video consultations are also available.

For a 30-minute complimentary consultation with RHM LAW LLP, call us at (213) 344-0043. We serve clients throughout the Los Angeles area and San Fernando Valley from offices in Encino and Los Angeles.

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Client Reviews

What Clients Say About Working With Us
    "Without the support of pro bono attorneys we couldn't do all the work we need to do, and your firm in particular is outstanding."

    Thank you for your great work on behalf of Ms. Johnson. Without the support of pro bono attorneys we couldn't do all the work we need to do, and your firm in particular is outstanding.

    - Skip K.
    "We are very happy that you were able to accomplish the modification of our loan in such a short period of time. Thank you again for your professional service."

    Dear Mr. Resnik: We wanted to thank you for your professional handling of our loan modification with GMAC mortgage. We are very happy that you were able to accomplish the modification of our loan in such a short period of time. Thank you again for your professional service.

    - W and B Mejia
    "These are top-notch pros that'll have your back. I cannot recommend them highly enough."
    Where to begin? I had a vile evil credit union repo my car over a misunderstanding, they wouldn't work with me even when I offered full payment plus repo fees (this was my first repo!) so I didn't know what to do. I met with a few lawyers but when I met with Simon he broke things down and gave me my options. I needed a car - so I filed BK and included the car to get it back. The evil credit union fought and Simon GOT ME MY CAR BACK!!! His team is amazing!!!! Maria Donna etc!!! These are top-notch pros that'll have your back. I cannot recommend them highly enough. Sincerely they saved my life. LA with no car!? ARGH!!!!!! *THANX ALL!!!!
    - Tim C.
    "He negotiated on my behalf with a credit card company and was able to settle with them for much lower than I could have on my own."
    I worked with David Kritzer at this firm, and he was great. He negotiated on my behalf with a credit card company and was able to settle with them for much lower than I could have on my own thanks to his knowledge and expertise in the field. If you have a debtor on your back go to him to get it taken care of.
    - Kelly S.
    "They were thorough, extremely knowledgeable, wonderful to deal with, thoughtful, and really helped guide me through what was one of the toughest times in my life."
    Matt and his team are the best!!  They were thorough, extremely knowledgeable, wonderful to deal with, thoughtful, and really helped guide me through what was one of the toughest times in my life. I never felt judged or looked down on. They were efficient and really were lifesavers during this tough time. I can not recommend them highly enough!!!!
    - Rusty H.
    "I cannot thank them enough for helping save my home. I would recommend them for anyone that is thinking about filing for bankruptcy or foreclosure on their home."
    I needed a bankruptcy attorney in Sherman Oaks and found Matt Resnik on Google. He has one of the best-reviewed bankruptcy law firms on Yelp so I decided to check it out his law firm for myself. I quickly found out that they are foreclosure specialists and they could help me with my issue. They made the process very easy for me and laid out my options for me. I cannot thank them enough for helping save my home. I would recommend them for anyone that is thinking about filing for bankruptcy or foreclosure on their home. They are the best bankruptcy law firm in Sherman Oaks.
    - Joseph R.
    "Matt and his staff conducted themselves with professionalism throughout the whole ordeal."
    I worked with Matt and his team for about a year to get through the paperwork shuffle and my personal experience was nothing short of fantastic. Legal situations have a tendency to get hairy, but Matt and his staff conducted themselves with professionalism throughout the whole ordeal. To keep it short, let's just say he under-promised and over-delivered.  Rarely would I ever say this about an attorney, but overall he was just a great guy. I would not hesitate to have him on my side of the courtroom again. World market is right across the street from his office and I even decided to get his staff a thank you / holiday gift card.  World market has excellent craft beer BTW, try the Einstock White Ale. They also validate parking. That just shows this isn't a fake review.
    - Dean C.
    "Was very impressed with the comprehensive professionalism of the firm..."

    Was very impressed with the comprehensive professionalism of the firm, especially Matthew Resnik... I had suffered through the incompetence of two previous bk lawyers not to mention fees far greater than anticipated, without resolution. Having never gone through bk before, I did not realize how difficult it could be...then, my case was turned over to Mr. Resnik...almost immediately there was a marked positive difference. Where there was little to no communication, all of a sudden I am getting updates...regularly. Further, my case was finally discharged...yet, Mr. Resnik continues to communicate, offer assistance...and, has NEVER asked for additional fees, which I am sure he could have justified...much unlike the two previous attorneys with which I was dealing. I have no reservations, whatsoever, referring and recommending Matthew Resnik for any and all business or personal bk issues...or, other wise. I have no doubt that he will be transparent on helping you regardless of the problem. Good guy.. good firm... a wonderful experience!

    - G.L
    "He not only saved my house but also got rid of all my debt. They are not your typical attorneys and their creativity really allowed me to do things that other attorneys never mentioned in previous consults."
    Fantastic office! I want to thank Matt for taking his time with me and sincere in his assistance. He spent over an hour with me for free during our initial consult. I left knowing exactly what's needed. He not only saved my house but also got rid of all my debt. They are not your typical attorneys and their creativity really allowed me to do things that other attorneys never mentioned in previous consults. Affordable and Outstanding firm and thank you for all you have done! My family thanks you!
    - David K.

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