Business Bankruptcy
in Beaverton, OR
 Business bankruptcy helps Oregon business owners in Beaverton, OR deal with debt that has outgrown what the business can pay, whether the goal is to close down cleanly or keep operating.
If you run a sole proprietorship, an LLC, or a corporation and the bills are piling up faster than revenue, bankruptcy can stop the collection pressure and give you a clear path forward. At Hutchinson Legal Services, we help business owners across Oregon and Washington sort out which option fits, and we are straight with you about what each one can and cannot do.
Business bankruptcy is not one thing. It depends on how your business is structured and what you want to happen to it. A Chapter 7 bankruptcy can wind down a business that is no longer viable, while a Chapter 13 bankruptcy can let a sole proprietor keep operating while repaying debt over time. The right move depends on your numbers and your goals.
Our firm has handled bankruptcy in Oregon since 1997, and over the years we have helped thousands of people, including business owners, get debt relief. We look at your business and your personal exposure together, because for most small business owners, the two are tangled.
On This Page
How Businesses Use Bankruptcy
How a business uses bankruptcy depends almost entirely on how it is set up. The structure of your business decides who actually files, what gets discharged, and whether the doors stay open.
A sole proprietorship is not separate from you. In the eyes of the law, you and the business are the same, so you file personally, and your business and personal debts are handled together in one case. An LLC or a corporation is a separate legal entity, which changes how bankruptcy works and who gets relief from it.
Chapter 7 for a Business Winding Down
When a business is no longer viable, Chapter 7 provides an orderly way to close it. A trustee takes control of the business assets, sells them, and pays creditors with the proceeds. For a corporation or LLC, this is a clean wind-down, but the entity itself does not receive a discharge, because only individual filers do. For a sole proprietor, the same Chapter 7 case can discharge personal liability for most business and personal debts at once.
Chapter 13 for a Sole Proprietor Staying Open
If you operate as a sole proprietor and want to keep the business running, Chapter 13 lets you reorganize. You repay creditors through a court-approved plan, usually over three to five years, while you continue to operate. Chapter 13 is only available to individuals, which is why it works for sole proprietors but not for a corporation or LLC trying to reorganize as an ongoing entity. At the end of the plan, your remaining eligible debt is discharged.
What About Chapter 11?
Chapter 11 lets a corporation or LLC reorganize and keep operating, but it is more complex and is not our focus. We concentrate on Chapter 7 for businesses winding down and Chapter 13 for sole proprietors who want to stay open. If your situation genuinely calls for Chapter 11, we will tell you plainly rather than steer you into a chapter that does not fit.
Business Debt and Personal Guarantees
The question we hear first from almost every business owner is whether filing will cost them their house and savings. The answer comes down to personal guarantees.
When you signed for a business loan, a lease, or a line of credit, the lender probably required a personal guarantee, your promise to pay if the business could not. That guarantee does not vanish when the business files. If your corporation or LLC files Chapter 7 and liquidates, lenders can still come after you personally on anything you guaranteed.
That is why we look at the business and your personal finances together. In many cases the owner files a personal Chapter 7 or Chapter 13 alongside the business, so the guaranteed debts get resolved too. We apply Oregon bankruptcy exemptions to shield as much of your personal property as the law allows.
Sorting out which debts belong to the business and which ones you personally guaranteed is one of the most important early steps, and it shapes the whole plan.
Your Business Bankruptcy Attorney in Beaverton
Scott M. Hutchinson has practiced bankruptcy law for more than 29 years and has filed over 2,000 bankruptcies. Early in his career he worked on both the debtor and creditor sides of bankruptcy at two of the largest firms on the West Coast, which gives him a clear read on how a business lender will approach your case. His attorney bio covers that background in full.
Business cases reward an attorney who can untangle where the business ends and your personal finances begin. Scott is licensed in the state and federal courts of Oregon and Washington and the Ninth Circuit Court of Appeals, and his practice covers Chapter 7, Chapter 13, and Chapter 12, so the chapter he recommends is the one that fits your business, not the only one the firm files.
There is a personal thread here too. Scott worked his own way out of significant debt early in his career, and that experience shapes how he works with owners who have poured everything into a business that is now struggling.
The Business Filing Process
A business bankruptcy moves through four main stages, and we handle the heavy lifting at each one.
Free Consultation and Business Review
We start by looking at your business structure, your business debts, your personal exposure on those debts, and what you want to happen to the business. This is where we figure out whether you are looking at Chapter 7, Chapter 13, or a personal filing alongside the business case.
Document Collection
We gather the financial picture: business income and expenses, a list of business and personal debts, loan and lease documents, and any personal guarantees you signed. You can download our bankruptcy intake forms and start filling them in before we meet.
Filing and the Automatic Stay
Once we file, the automatic stay takes effect and creditors must stop collection calls, lawsuits, and garnishments while your case proceeds. For a business buried in collection activity, that pause alone can be the breathing room you need to think clearly.
Resolution
From here the path depends on the chapter. In a Chapter 7 wind-down, a trustee handles the liquidation of business assets. In a Chapter 13, you begin plan payments while keeping the business open. We stay with you through the case, including any creditor disputes, until it closes.
Benefits for Your Business
The biggest benefit of business bankruptcy is control. Instead of creditors deciding what happens to your business through a pile of separate lawsuits and garnishments, you get one orderly legal process for resolving the debt.
The automatic stay is the first relief most owners feel. From the day we file, creditors cannot sue, garnish, or keep calling. We notify your creditors and the court directly, which is what actually stops the pressure.
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A clean wind-down – We guide a closing business through Chapter 7 so the liquidation stays court-supervised and orderly instead of turning into a wave of separate lawsuits.
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Keep operating – We build a Chapter 13 plan that lets a sole proprietor stay open while repaying debt on a schedule the court approves.
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Personal exposure addressed – When you file personally alongside the business, we apply Oregon exemptions and clear eligible guaranteed debt so the case does not follow you home.
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One process instead of many – We pull the scattered collection actions into a single proceeding, so you stop fighting creditors one at a time. |
Which of these you get depends on your structure and your goals, and that is exactly what we map out before anything is filed.
Why Work With Our Firm
Most bankruptcy work is consumer work, and plenty of firms treat a business owner like any other consumer filer. We don’t. Our firm has handled bankruptcy in Oregon since 1997, and we look at the business and the owner’s personal exposure as one connected problem, because that is how it actually plays out.
We also stay in our lane and say so when a case is beyond it. We handle Chapter 7 for businesses winding down and Chapter 13 for sole proprietors staying open. If you need a full Chapter 11 reorganization, we will tell you rather than take on a case that does not fit, which saves owners real time and money.
From our Beaverton office, we serve business owners across Oregon and Washington, from the Portland metro out to the rural counties in our service area. Wherever your business is based, the first step is the same: a clear look at your numbers and your options. We will point you to the bankruptcy options that fit, whether or not that means filing with us.
Business Bankruptcy Costs
Cost matters, and we will be straight with you about it. A business case usually takes more work than a straightforward consumer filing, because there are business assets, business debts, leases, and personal guarantees to sort through. What it costs depends on your business structure, how many creditors are involved, and whether you also need to file personally.
We keep our fees reasonable and offer payment plans so you are not paying everything up front. Your first consultation is free and confidential, and we go over fees, the process, and what to bring at that free consultation.
We will not put a flat number on a business case sight unseen, because an honest estimate depends on the details of your business. Once we have reviewed your situation, you will know what to expect before you commit to anything.
Schedule Your Consultation
If your business debt has outgrown what the business can carry, the sooner we look at it, the more room you have to act. Call Hutchinson Legal Services at (503) 808-9032 or request an appointment online to set up a free, confidential consultation. We’re at 12655 SW Center St., Suite 505 in Beaverton, Oregon 97005. You can also reach us through our Contact page with any questions before you come in.
Frequently Asked Questions
Can I keep my business open if I file bankruptcy?
Yes, if the business still earns enough to fund a repayment plan. As a sole proprietor with steady income, you can use Chapter 13 to keep operating while repaying debt over three to five years. A corporation or LLC can’t reorganize through Chapter 13; that takes Chapter 11, which we don’t handle. If the numbers no longer work, Chapter 7 is the cleaner exit.
Will I lose my house if my business files for bankruptcy?
Not automatically. If your business is a corporation or LLC, its bankruptcy doesn’t reach your personal assets directly. The real risk is any debt you personally guaranteed, which survives the business filing. When that’s a concern, we file personally too, and Oregon’s homestead exemption typically protects your home equity up to the limit the law sets.
What’s the difference between Chapter 7 and Chapter 13 for a business?
Chapter 7 winds a business down: a trustee sells the assets, and the case is usually over in three to four months. Chapter 13 runs much longer, a three-to-five-year repayment plan, and only individuals can file it, which is why it fits sole proprietors but not a corporation or LLC. The shorthand: Chapter 7 to close the business down, Chapter 13 to keep a sole proprietorship open.
Does my LLC or corporation get its debt wiped out in Chapter 7?
No, and the reason trips people up. A discharge erases a debtor’s personal liability, but a corporation or LLC isn’t a person, so it can’t get one in Chapter 7. In practice that’s fine: the trustee sells the assets, the entity stops operating, and there’s nothing left to collect against. A sole proprietor is different, because you file as an individual, your Chapter 7 does discharge your eligible business and personal debts.
What if my business is a farm or a fishing operation?
Farms and commercial fishing operations have their own chapter, Chapter 12 bankruptcy, which is built around seasonal income and debt limits set higher than the consumer chapters allow. If your business is a family farm or fishing operation, Chapter 12 is usually a better fit than a standard business filing, and we file those cases too.
Do I have to take the means test to file business bankruptcy?
Often not. The means test screens consumer filers, so if your debts are primarily business debts rather than personal ones, you may be exempt from the bankruptcy means test when filing Chapter 7. Whether your debts count as mostly business or mostly consumer is a fact-specific question we work through during your consultation.
Why choose Hutchinson Legal Services for business bankruptcy in Beaverton?
The main reason is experience with the lender’s side of the table. Our attorney has filed over 2,000 bankruptcies since 1997 and spent his early career working both the debtor and creditor sides of bankruptcy, so he can anticipate how your lenders will respond when the business files. He also files Chapter 7, Chapter 13, and Chapter 12, so the recommendation you get is the chapter that fits, not the only one we offer. |
