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Bankruptcy Law/Dismissing a SBA loan

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Expert: - 8/20/2009


Question
If an individual is planning on filing BK 7 to clear their unsecured debt including their SBA loan.  Would the SBA require them to dissolve the business in which it lent money for. Could you keep the business active?

Answer
The SBA has no control over the jurisdiction of the United States Bankruptcy Court, so any requirements will be those set down in the Bankruptcy Code.  The answer to your question depends on the type of business entity you're talking about.  If it is an individual sole proprietorship, then that person can usually continue operating the business, but of course all the business assets and, if there is a value to the business itself as an ongoing concern, that must also be valued and listed as an asset.  The Bankruptcy Trustee may sell these assets if the individual does not have sufficient exemptions under applicable state or federal law to protect them.

To see more on exemptions, visit http://www.bklaw.com/exemptions.html

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Mark J. Markus- California Bankruptcy Attorney

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Mark J. Markus is a Los Angeles bankruptcy attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau and is AV-rated by Martindale-Hubbell. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

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Visit our California bankruptcy webpage at http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on

  • Which Chapter to File,
  • business bankruptcy,
  • chapter 7 bankruptcy,
  • chapter 11 bankruptcy,
  • chapter 13 bankruptcy,
  • Do You Need a Lawyer to File Bankruptcy?
  • Frequently Asked Bankruptcy Questions

    Also visit our Los Angeles bankruptcy blog for interesting articles and much more.



    Organizations
    Central District Consumer Bankruptcy Attorneys Association (CDCBAA) Los Angeles County Bar Association (LACBA) Commercial Law & Bankruptcy Section of the Los Angeles County Bar Association Financial Lawyers Conference (FLC) National Association of Consumer Bankruptcy Attorneys (NACBA) Los Angeles Bankruptcy Forum (LABF) American Bankruptcy Institute (ABI) San Fernando Valley Bar Association (SFVBA)

    Publications
    Central District Consumer Bankruptcy Attorneys Association Newsletter September 2007 (Vol. 1, Issue 2)

    Education/Credentials
    J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

    Awards and Honors
    AV Rated by Martindale-Hubbell (http://www.martindale.com) A+ Rated by Better Business Bureau

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