Business Bankruptcy Attorney in Fayetteville and Fort Smith, Arkansas

Starting a business is a bold venture, and there are times when financial challenges can become overwhelming. The need for financial relief is when bankruptcy might become a topic of conversation.  

At the Bond Law Office, our business bankruptcy attorney can guide you through the decision-making process of declaring bankruptcy and the various steps involved throughout the process. 

Located in Fayetteville and Fort Smith, Arkansas, we serve clients throughout The Arkansas River Valley and the cities of Harrison, Eureka Springs, Clarksville, Waldron, and Mena, Arkansas. Contact Bond Law Office today to learn how we can help you discover a positive financial path forward.  

Why Consider Business Bankruptcy? 

Business bankruptcy can provide a necessary lifeline for companies facing insurmountable financial difficulties. It allows a business company to reorganize its debts and operations through a structured legal process. This can help avoid the liquidation of assets, enabling the continuation of activities while addressing financial issues.  

Additionally, bankruptcy offers protection from creditors, preventing them from taking aggressive collection actions and providing breathing space for the business to develop a feasible recovery plan.

By considering bankruptcy, companies are also often able to negotiate more favorable terms with creditors, potentially reducing the overall debt burden.  

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Types of Business Bankruptcy 

Different circumstances require different types of bankruptcy. Our experienced business bankruptcy attorney is well-qualified to help you decide which one is best for your situation. 

Chapter 7 Bankruptcy 

Chapter 7 bankruptcy, often referred to as "liquidation bankruptcy," is designed for businesses that cannot continue operations and need to liquidate their assets in order to pay off their creditors. 

Eligibility Criteria 

To qualify for Chapter 7, a business must demonstrate insolvency, meaning its debts exceed its assets, and it cannot meet its financial obligations. Eligibility for Chapter 7 is also dependent on the type of business and whether it is organized as a sole proprietorship, partnership, corporation, or LLC. 

Process and Key Steps 

The Chapter 7 process involves filing a petition with the bankruptcy court, appointing a trustee to oversee asset liquidation, and distributing the proceeds to creditors. The business ceases operations, and its assets are sold to pay off secured and unsecured claims. 


  • Quick resolution, typically within a few months

  • Debt discharge for the business, providing a fresh start

  • Relieves the business from ongoing debt payments


  • Complete liquidation of business assets

  • Business operations cease permanently

  • Potential loss of personal assets if business debts are personally guaranteed

Chapter 11 Bankruptcy 

Chapter 11 bankruptcy, also known as "reorganization bankruptcy," allows businesses to continue operating while restructuring their debts. This type of bankruptcy is typically used by larger corporations or businesses with substantial assets. 

Eligibility Criteria 

Any business entity, whether corporation, partnership, or sole proprietorship, can file for Chapter 11. 

Process and Key Steps 

The Chapter 11 process involves filing a petition, creating a reorganization plan, and getting plan approval from the bankruptcy court and creditors. The business continues operating under court supervision while working to restore its financial health. 


  • Business operations can continue

  • Opportunity to negotiate with creditors to restructure debts

  • Can preserve jobs and business relationships


  • Complicated and lengthy process, often taking several years

  • Expensive due to legal and administrative costs

  • Requires court and creditor approval of the reorganization plan

Chapter 12 Bankruptcy 

Chapter 12 bankruptcy is designed specifically for family farmers and family fishermen to restructure their debts while continuing operations. This type of bankruptcy provides a streamlined process tailored to address the unique financial challenges faced by those in the agricultural and fishing industries. 

Eligibility Criteria 

To qualify for Chapter 12, a debtor must be either a family farmer or a family fisherman with a regular annual income. The debtor must meet certain debt limits and demonstrate that at least 50% of their income comes from farming or 80% comes from fishing operations. 

Process and Key Steps 

The Chapter 12 process involves filing a petition with the bankruptcy court, proposing a repayment plan over three to five years, and gaining approval from the court and creditors. The debtor continues their farming or fishing operations while repaying creditors under the terms laid out in the approved plan. 


  • Allows continued operation of farming or fishing business

  • More flexible and less complex than Chapter 11

  • Tailored to accommodate the seasonal nature of farming and fishing income

  • Can reduce overall debt and reorganize payment schedules


  • Repayment plan requires court and creditor approval

  • Limited to family farmers and family fishermen

  • Requires strict adherence to the repayment plan to avoid dismissal or conversion to Chapter 7

  • May still result in the loss of some assets if plan payments are not met

Chapter 13 Bankruptcy 

Chapter 13 bankruptcy is available for individuals, including sole proprietors, and allows for the reorganization of debts into a manageable repayment plan. This type of bankruptcy is not available to corporations or partnerships. 

Eligibility Criteria 

To qualify, the business owner's unsecured debts must be less than $419,275, and secured debts must be less than $1,257,850. The business owner must also have a regular income and be able to make payments under the repayment plan. 

Process and Key Steps 

The Chapter 13 process involves filing a petition, proposing a repayment plan, and getting approval from the bankruptcy court. The debtor makes regular payments to a trustee who distributes the funds to creditors over a three to five-year period. 


  • Allows for debt reorganization without liquidating business assets

  • Provides a structured repayment plan

  • Can protect personal assets from liquidation


  • Only available to individuals, not corporations or partnerships

  • Requires adherence to a strict repayment plan

  • Lengthy process, typically lasting three to five years

Benefits of Filing for Business Bankruptcy 

  • Protection from creditors: Filing for bankruptcy provides an automatic stay, which halts all collection activities from creditors. 

  • Opportunity to reorganize or liquidate assets: Depending on the bankruptcy chapter, businesses can either restructure their debts or liquidate assets in an orderly manner. 

  • Relief from overwhelming debt: Bankruptcy offers a legal solution for businesses overwhelmed by debt. 

  • Fresh start for the business: Post-bankruptcy, businesses can rebuild without the burden of insurmountable debt. 

Consequences of Bankruptcy to Be Aware Of 

While filing for business bankruptcy may offer a reprieve and a path to recovery, it is essential to understand the potential drawbacks and long-term effects. Here are some consequences to consider before proceeding with bankruptcy: 

  • Impact on business operations: Bankruptcy can disrupt daily operations, especially under Chapter 7 where liquidation occurs. 

  • Effects on credit rating: Filing for bankruptcy will negatively impact the business's credit rating, making it harder to obtain financing in the future. 

  • Potential for asset liquidation: Depending on the bankruptcy chapter, business assets may be liquidated to pay off creditors. 

  • Legal and financial ramifications: Bankruptcy involves legal proceedings and can have long-term financial consequences. 

Contact the Bond Law Office to Create a Financial Relief Plan 

During your initial consultation with the Bond Law Office, we will take the time to understand your unique financial situation. We provide a comprehensive assessment to determine the best course of action for your business. 

In the bankruptcy filing process, we guide you through every step and double-check that all necessary documentation is accurately completed and submitted. If our decisions lead to court hearings and meetings with creditors, our experienced business bankruptcy attorney will present your case well and negotiate on your behalf.  

Our support doesn't end with the bankruptcy filing. We provide ongoing assistance to help you rebuild and thrive post-bankruptcy. This includes strategies for rebuilding credit, support for business operations post-bankruptcy, and long-term business planning and strategy.

Business Bankruptcy Attorney in Fayetteville and Fort Smith, Arkansas

Don't let financial distress dictate the future of your business. Reach out to Bond Law Office and let our business bankruptcy attorney guide you through every step of the bankruptcy and post-bankruptcy process. Schedule your free consultation today and take the first step toward reclaiming stability and success for your business. Contact us now to learn more about your options and how we can help.