As a small business owner looking at a potential bankruptcy, it is highly recommended that the business owner speaks with a Chp 11 bankruptcy lawyer before proceeding. There are many nuances that come into play when a person is filing a bankruptcy, especially if the bankruptcy is being filed on behalf of a small business. Most business owners know exactly how to do what they do well, which is why they are in business for themselves.
However, a Chapter 11 bankruptcy attorney has the expertise and knowledge to safely guide the business owner through the process. We can help business owners avoid the many pitfalls that can potentially derail the bankruptcy proceedings and leave the owner with no options.
Bankruptcy is a serious step
Contrary to popular belief, bankruptcy is an extraordinary step that a business must only take if there are no other options for acquiring credit or if extensive debts require a reorganization. Even once a company decides to file for bankruptcy, the business owner will have to decide what type of bankruptcy they need.
Impact on the business owner
If the business owner is simply looking to do a reorganization, then the business may want to consider filing Chapter 13 bankruptcy. However, if the debts are so large that the business has no possible way of sustaining, then a Chapter 11 may be the best option. The only way for a business owner to know for sure is to speak with a Chp11 lawyer and find out all of the nuances that go into a Chapter 11 bankruptcy, or a Chapter 13 bankruptcy.
The owner of the business also has to consider if there will be an impact on their personal life and credit when the bankruptcy is complete. While most organizational structures protect business owners, there is a chance of some debts passing on to the business owners once the bankruptcy is complete. Thus, it is essential to speak with a qualified Chapter 11 bankruptcy lawyer in order to determine the best option.
Staying in business
One of the most common questions business owners ask their Chp 11 bankruptcy lawyer is whether or not they can continue to stay in business after finalizing the bankruptcy. The answer is that it depends. Under Chapter 11 bankruptcy, all of the assets of the business are liquidated in order to satisfy outstanding debts. In a situation like this, it is highly unlikely that the business will be able to sustain or even rebound from the bankruptcy. For business owners who end up in a Chapter 11 situation, it is more recommendable that they start fresh with a new business, new partners, and a better business plan.
On the other hand, if the business owner has determined that the business should carry on, then they need to explore all of the different bankruptcy options, potentially excluding Chapter 11 bankruptcy, with a qualified bankruptcy attorney. In order to get the best advice based on a particular set of circumstances, give us a call so that we can sit down and evaluate your situation.
Note: This is for information purposes only and does not constitute legal advice.