If your small business didn’t go as planned…
bankruptcy might be the best solution
Running a business doesn’t always go according to plan. Unexpected expenses, declining revenue, or mounting debt can put even the most dedicated business owners in a difficult position. When financial strain becomes overwhelming, bankruptcy may be the most practical way to protect what you’ve built and move toward a stable future.
At the Law Office of Richard Hughes, our business bankruptcy lawyers help business owners in Palestine, TX, evaluate their options and take strategic steps toward debt relief. With personalized guidance and decades of experience, Richard Hughes works to protect your business interests, personal assets, and long-term peace of mind.
Trust in Experience
Expert Business Bankruptcy Guidance
With more than 30 years of experience handling business bankruptcy cases across East Texas, Richard Hughes understands the unique challenges faced by local business owners in Palestine and the surrounding communities.
Whether your company is struggling with unpaid vendors, tax debt, lease obligations, or creditor lawsuits, Richard Hughes provides clear, honest advice to help you make informed decisions. His approach is practical, strategic, and tailored to your financial reality.
Tailored Bankruptcy Strategies for Palestine, TX, Businesses
Every business is different, and so is every financial situation. Richard Hughes develops customized bankruptcy strategies based on your goals, your industry, and your current financial position.
He will help you determine whether Chapter 7 business liquidation or Chapter 11 reorganization is the best option for your circumstances. Throughout the process, you’ll receive clear explanations of your rights, responsibilities, and next steps so there are no surprises.
Protecting Your Business Assets & Interests
As a seasoned business bankruptcy lawyer, Richard Hughes explores every available option to reduce the impact of bankruptcy and help position your business for the future. His goal is not just to address immediate debt, but to create a foundation that allows you to move forward with clarity and confidence.
With strong negotiation skills and in-depth knowledge of bankruptcy law, Richard Hughes is a dedicated advocate for business owners facing financial hardship.
Contact Richard Hughes Law Firm
If your business is facing overwhelming debt, waiting can limit your options. The sooner you understand your legal rights, the more control you’ll have over the outcome.
Contact the Law Office of Richard Hughes today to schedule a confidential consultation and learn how an experienced business bankruptcy lawyer for Palestine, TX, can help you take the next step toward financial relief.
Business Bankruptcy FAQs
What’s the difference between Chapter 7 and Chapter 11 bankruptcy?
Both Chapter 7 and Chapter 11 can help businesses address overwhelming debt, but they serve different purposes.
Chapter 7 involves liquidating the business and closing it permanently. A court-appointed trustee sells the company’s assets and distributes the proceeds to creditors.
Chapter 11 focuses on reorganizing debt rather than shutting down operations. This option allows a business to renegotiate leases, restructure tax obligations, sell unnecessary assets, and continue operating while working toward financial recovery. With Chapter 11, debtors keep ownership of the business, unlike with Chapter 7.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is commonly used by corporations and traditional business entities. The business is liquidated to repay creditors, and any remaining eligible debts are discharged.
A trustee is appointed to oversee the process, manage asset sales, and represent creditor interests.
Do I have to qualify for Chapter 7 bankruptcy?
Yes. Chapter 7 includes income-based eligibility requirements. If the business or owner has sufficient income to repay debts through a structured plan, the court may require a different bankruptcy option.
While income below the median typically qualifies for Chapter 7, a judge may still require repayment if funds are available.
What is a “means test”?
The means test is a financial calculation used to determine eligibility for Chapter 7 bankruptcy. It evaluates income, expenses, and overall financial capacity.
While online calculators can offer a general idea, a bankruptcy attorney can provide a more accurate assessment.
Will Chapter 7 wipe out all of my debts?
Chapter 7 can discharge many unsecured debts, but certain obligations are not eliminated, including:
- Past-due child support
- Student loan payments
- Recent debts for luxury goods
- Debts incurred via fraud (like bad checks)
- Some tax debts
Can I keep my home in a Chapter 7 bankruptcy?
In Texas, the homestead exemption offers strong protection. If your home equity is exempt and mortgage payments are current, you may be able to keep your home.
If payments are delinquent, liquidation may occur. Richard Hughes can explain how Texas exemptions apply to your situation.
How will Chapter 7 affect my credit?
Bankruptcy will heavily impact your credit score initially. Chapter 7 typically remains on your credit report for up to 10 years. However, many individuals and business owners begin rebuilding credit much sooner with the right strategy.
What is Chapter 11 bankruptcy?
Chapter 11 allows businesses or individuals to reorganize debt while remaining protected from creditor collection efforts. It is commonly used by businesses that want to continue operations while restructuring financial obligations.
Who can file for Chapter 11 bankruptcy?
Most individuals and business entities, including corporations, partnerships, and LLCs, can file for Chapter 11. There are no strict income or debt limits.
Because Chapter 11 is complex, it is most often used by businesses with ongoing operations rather than individuals.
Are there income requirements or restrictions for Chapter 11?
No. Chapter 11 does not have income requirements, making it available to a wide range of businesses and individuals.
What happens when a business files for Chapter 11?
Once filed, the business begins reorganizing its debts under court supervision. A trustee may be appointed to represent creditor interests, and an automatic stay goes into effect.
This stay temporarily halts collection efforts, allowing time to restructure debts and develop a repayment plan.
What is an “automatic stay” in Chapter 11 bankruptcy?
An automatic stay is a court order that stops creditors from continuing collection actions after a bankruptcy filing. This includes lawsuits, foreclosures, and repossessions.
What does it mean to “reorganize” business debts?
Reorganization reduces financial strain by adjusting how debts are repaid. This may include extending payment terms, lowering monthly obligations, or selling nonessential assets.
The goal is to allow the business to continue operating during and after bankruptcy.
Will I retain control of my business after Chapter 11?
Yes. In most cases, business owners retain control of daily operations and decision-making throughout the Chapter 11 process, even though the court and trustee oversee certain financial matters.