The Bankruptcy Guide For Small Business Owners In Las Vegas, Nevada

There is no better example of the American dream than setting out with an idea to start one’s own business. But even the most innovative businesses struggle, which is evidenced by countless major companies declaring bankruptcy since the pandemic. Whether you’ve run your own business for years or started in your line of work recently, there are a number of pressures making it harder than ever to be a small business owner. If you have struggled with rising costs and declining customers with your Las Vegas small business, you aren’t alone. The economy has been tough for small business owners throughout our state and the rest of the country. If your creditors have you backed against a corner, you can take back control by declaring bankruptcy. Put a hard stop to collections with the automatic stay and clear liabilities so you can move forward with a clean slate. Schedule your free consultation with our firm to learn more today at 702-370-0155. 

Closing an LLC in Las Vegas

If you’re a small business owner in Las Vegas, one of your primary options for debt relief is chapter 7 bankruptcy. Chapter 13 bankruptcy won’t be an option for the most part, and chapter 11 bankruptcy is typically far more complex than chapter 7. But the downside of filing for chapter 7 is that it requires a business to liquidate- or in other words, shut down. This doesn’t have to put the debtor out of business forever, but it can be inconvenient. 

When a small business owner runs an LLC, their business is technically a separate entity. Even though the business and individual are inextricably connected, the business owner can shed the business, and its debts, without incurring personal liability. A business owner debtor can also protect assets that originally had a business purpose using bankruptcy exemptions. This may be so the debtor can continue to have these items for personal use in the future. But it also could be so that the debtor could open up a new business after bankruptcy and use the assets for its operation. The debtor can’t own and operate the same business under the same name after liquidating debts in chapter 7 bankruptcy. However, this doesn’t prevent the debtor from opening a new LLC in the future. The debtor also isn’t prevented from starting a new business after discharge- even if it is highly similar to their pre-bankruptcy business. 

Exemptions to Apply to Your Belongings as a Small Business Owner

As mentioned above, a business owner can protect assets in bankruptcy by applying exemptions. There are several categories of exemptions set forth under bankruptcy law. Some of the things you may own may fall into more than one category. It will be up to you- or your bankruptcy attorney- to make sure these exemptions are applied as strategically as possible. Some of the exemptions that a bankruptcy debtor who owns a small business should consider using are:

• The motor vehicle exemption: You may need your car to get to your workplace, or it could be a crucial component to completing your business responsibilities. As of 2026, Nevada’s motor vehicle exemption protects up to $15,000 in a debtor’s vehicle. The exemption increases if the debtor is disabled and requires a specialty vehicle. 
• Professional library, equipment, and inventory: It’s easy to see how this exemption could apply to many of a small business owner’s possessions. This exemption is worth $10,000. 
• Private libraries, art, musical instruments, and jewelry: This exemption protects $5,000 worth of the valuables described. You could use it to protect assets remaining from the exemption described above. It could be a highly relevant exemption if you own your own LLC. For example, if you are a musician or teach music lessons, you could use this exemption to protect your instrument. You could also use it to protect sheet music or important books related to your work. 
• One gun and uniforms required by law: Security can be an important aspect of running your own business. For you, that might mean owning your own firearm. You can protect one if you file for bankruptcy protection in Nevada. 
• Appliances, furniture, electronics, household goods, clothing, and home and yard equipment: This exemption protects $12,000 of assets in this category. There are plenty of items that you might use in your business that could be protected by this exemption. 

The Small Business Bankruptcy Act for Las Vegas Locals

Not every business owner declaring bankruptcy wants to go down the route of chapter 7, which requires liquidation. The other option for a business owner struggling with debt is chapter 11 bankruptcy. This form of bankruptcy is popular among business owners who believe in giving their companies (at least) one more shot. But it is a far more complex and costly form of bankruptcy than chapter 7. A major factor contributing to this is the creditor committee in chapter 11 bankruptcy. A standard filing requires that the debtor’s top creditors join to form this committee, and vote on issues affecting the bankruptcy case’s resolution. This can cause the debtor and committee to go back and forth for months if the debtor didn’t enter the bankruptcy with a pre-packaged deal with their creditors. 

Lawmakers could recognize how chapter 11 bankruptcy procedures were prohibitive to small business owners, and thus passed the Small Business Reorganization Act, or SBRA, in 2019. This law significantly changed the landscape for small business owners in chapter 11 bankruptcy. It changes the requirement of a creditor committee to only for cause. However, in exchange for this privilege, the trustee is more involved in the case. But if the trustee is able to confirm the debtor’s proposed plan, the case should only take a matter of months to complete. If your business has too many assets to protect in chapter 7 bankruptcy, this may be a better form of bankruptcy for you as a business owner. Otherwise, you should work with a bankruptcy attorney to formulate your post-discharge business plan. 

Are You a Struggling Small Business Owner in the Las Vegas Area? Learn More About How Debt Relief Could Change Your Entire Financial Situation Today. 

Las Vegas has been one of the most impacted metropolitan areas by post-pandemic market pressures like rising costs and decreased customer demand in response to the increasing cost of living. It has led to several major companies, both state- and nationwide, to file for bankruptcy protection. Bankruptcy’s major benefits include keeping creditors away from your assets and clearing debts to increase your odds of financial success in the future. It doesn’t have to mean the end of how you earn a living if you run your own business. Exemptions and business bankruptcy strategies can give you a fresh start after your obligations have been discharged. Don’t wait until creditors have repossessed assets or drained your accounts to learn about bankruptcy’s powerful debt relief. Our firm offers free consultations by phone so you can enter the bankruptcy process feeling prepared. Learn more about how you can clear debts as a small business owner in Las Vegas from an experienced bankruptcy professional today at 702-370-0155.