Small business owners who are weighed down by debt often have personal assets at risk. Learn about bankruptcy and other debt relief options, as well as which types of property can be protected from creditors.

1. Presented By
Bankruptcy For
Business Owners:
Opportunities and Threats

2. Small business owners who get in financial difficulty face
tough choices.
At Lefkovitz & Lefkovitz, we are skilled at helping clients
identify their debt relief options and take effective action.
This action could be a bankruptcy filing or some other
step, such as direct negotiation with creditors.

3. In this presentation
we will discuss:
Vulnerability of restaurantsand other smallbusinesses to cash flow problems
Alternativesto bankruptcythat makesense for certaincircumstances
Different typesof bankruptcyand how they workfor business owners
Whathappens whena business owner personally guarantees loans
Theadvantagesand possible downsideof Chapter 7 bankruptcy
Whatpropertyyou cankeep and why exemptionsareimportant
Waysour firm hascontributed to the law of Tennessee bankruptcyexemptions

4. Even successful small businesses are
vulnerable to changes. The survival
rate for businesses goes down
markedly over time.
Over the past decade, only about half
of new businesses are still operating
five years later.
Restaurants, in particular, have been
struggling in recent years.

5. Direct negotiation with creditors is sometimes possible to
resolve debts without filing bankruptcy.
It is necessary to determine, however, whether it is possible to
turn the business around.

6. The most common types of
bankruptcy are Chapter 7, Chapter 11
and Chapter 13.
For businessowners, the choice usually comes downto Chapter 7 and Chapter 11.
Chapter11 can beused to reorganizea businessby getting creditors to accept a
repaymentplan.This generally makessense, however,only if it is feasibleto make
the businessprofitablegoing forward.
Chapter7 takescareof many unsecured debtsfor individuals. This is helpful for
businessowners who mayhave personally guaranteedloans for the business.

7. Small business owners often have personal
assets at risk because financing the business
required giving personal guarantees for loans.
But a Chapter 7 bankruptcy filing can get a
business owner off the hook for many types of
debt that are not secured by collateral.

8. A Chapter 7 bankruptcy filing allows for certain debts
to be discharged without requiring repayment from
future earnings. A business owner can start a new job
or another business venture without having to pay
back those debts.
Chapter 7 only allows you to keep your assets up to a
certain exemption level. This makes exemptions very
important.

9. Chapter 7 generally can’t be used to discharge debts from
child or spousal support, student loans or services obtained
by fraud.
Tax debt is separate issue with detailed rules on what can
and can’t be discharged.

10. Bankruptcy is mainly federal law, but each state is allowed to
choose whether to follow the federal system of exemptions
or create its own.
In Tennessee, only the state system of exemptions applies.
Exemptions are especially important in Tennessee because
Tennessee leads the nation in bankruptcy filings.
There were more than 36,000 filings in
Tennessee in 2015. This was more
than twice the national average.

11. Attorney Steve Lefkovitz has handled numerous notable
cases that have shaped bankruptcy law in Tennessee.
One key case involved the homestead exemption.
This exemption protects a certain amount of a
principal residence from creditors.
Mr. Lefkovitz’s published cases also include
influential cases on alimony arrears and on fraudulent
or questionable conduct by a debtor before a
bankruptcy filing.
Attorney Steve
Lefkovitz

12. Free White Paper
To learn more about your options
as a small business owner for
resolving debts and moving
forward, please visit our website
and read our white paper.
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