Owning a small business is rewarding—but it can also come with unpredictable financial challenges. Whether due to economic downturns, supply chain issues, or personal hardship, many business owners find themselves overwhelmed by debt. Fortunately, bankruptcy may offer the opportunity to restructure, recover, or even restart.

Connecticut bankruptcy attorney Mark Kratter has helped many small business owners navigate the legal and financial complexities of bankruptcy. Here's what you need to know.

Bankruptcy Is Not a Business Failure—It’s a Strategic Reset

Many successful entrepreneurs have filed for bankruptcy at some point in their careers. Bankruptcy doesn’t mean giving up—it’s a legal tool designed to help you protect assets, eliminate debts, and restructure obligations.

Understanding Your Bankruptcy Options as a Business Owner

There are several bankruptcy chapters that may apply to small businesses, depending on the business structure and financial goals:

Chapter 7 Bankruptcy

• Suitable for businesses that are shutting down.

• Involves liquidation of assets and discharging of debt.

• Business entities like corporations and LLCs cannot discharge debt, but individual sole proprietors can.

Chapter 13 Bankruptcy

• Available only to individuals, including sole proprietors.

• Enables restructuring of personal and business debts into an affordable repayment plan.

• Allows you to keep your business running while catching up on obligations.

Chapter 11 Bankruptcy (including Subchapter V)

• Often used by businesses that want to continue operations while reorganizing debt.

• Subchapter V is a streamlined, more affordable version of Chapter 11 designed for small businesses with lower debt limits.

• Allows owners to stay in control of day-to-day operations while repaying creditors over time.

Attorney Mark Kratter can help assess whether your business qualifies for Subchapter V and if it’s the right solution for your future.

Common Situations Where Bankruptcy Helps Small Business Owners

• Overwhelming business credit card or vendor debt

• Pending lawsuits or judgments

• Falling behind on lease or equipment payments

• Personal guarantees putting your home or assets at risk

• Cash flow problems that can’t be fixed with loans or refinancing

Protect What You’ve Built—and Plan for a Stronger Future

Many business owners are surprised to learn that bankruptcy can be a springboard to financial stability—not the end of their entrepreneurial journey. Mark Kratter works closely with Connecticut business owners to craft personalized strategies for debt relief, whether that means closing, restructuring, or continuing operations with a clean slate.

Ready to Explore Your Options?

If your small business is struggling, you don’t have to face it alone. Attorney Mark Kratter offers experienced, compassionate counsel tailored to small business owners in Connecticut.

📞 Call (203) 847-2000 or visit www.laws4ct.com for a confidential consultation.