If you’re swimming in debt and are considering a business bankruptcy, we can help. When you start a business, you have high expectations for success. However, some businesses face bumps in the road along the way. You may feel like you have little control over your income and expenses right now. It’s important to seek the help of a compassionate business bankruptcy attorney like Diane Anderson. Call us today at 530-626-6441 for a free consultation.
What Is Business Bankruptcy?
Small businesses face financial issues frequently; however, you do not have to see it as a failure. Business bankruptcy may give you the relief that you need to move forward with your life. It can be difficult to determine if it’s the right time to file bankruptcy or if you should continue to seek other debt management options. If you have questions, it’s best to consult with a business bankruptcy lawyer who can present your legal options and make sure your best interests are protected.
Many small business owners have their own personal assets tied to their businesses. If your personal assets are at risk, you may consider business bankruptcy to protect yourself. You may have other options available to manage your business debts as well. You may consider seeking additional loans, obtaining investors or partners, or closing the business as a way to manage the debt of the business. However, if your own personal assets, such as your house, your retirement accounts, or your savings are tied up in the business, bankruptcy may be the best option for you.
Types of Business Bankruptcy
When considering bankruptcy for a business, you may have questions about what type is right for you. We can help with the following types of business bankruptcy:
- Chapter 11 – Although this is considered a standard form of business bankruptcy, it is generally only used for large operations and publicly traded companies. Businesses that wish to reorganize may seek a Chapter 11. Business owners with high personal net worth and regular income may also seek this type of bankruptcy.
- Chapter 7 – Just like a personal bankruptcy, a Chapter 7 can provide liquidation that will effectively end a business. This will dispose of debts so that they do not come back on you personally. This is also the fastest and easiest method of business bankruptcy. However, you may have limitations if you have significant ongoing assets or have a large operation.
- Chapter 13 – This method of bankruptcy offers an option of a repayment plan for debts when businesses want to remain in operation. This is a good option if you’re still able to pay debts, but need more manageable payments in the future. This may also protect your personal assets by freeing up capital for the business. You can learn also about CHAPTER 7 VS CHAPTER 13 here
Depending upon your business income, remaining assets, amount of debt owed, and financial goals, you may want to seek a Chapter 11, Chapter 7, or Chapter 13 business bankruptcy. In some cases, laws or the court may dictate which type of bankruptcy you must choose. To determine which is best for you and seek a bankruptcy in the most efficient way possible, you should seek the legal advice of an experienced business bankruptcy lawyer at The Law Office of Diane Anderson. Almost all unsecured debt can be discharged in bankruptcy.
How to Avoid Bankruptcy as a Business
Starting a business with a solid business plan is one of the best methods of avoiding bankruptcy. By thoroughly researching the market and understanding demand in your area, you may be able to avoid problems in the future. You should also be aware of your debt management options and have backup plans for how you will move forward if your business is threatened in the future.
Businesses can avoid bankruptcy by taking precautionary measures before debt becomes a big issue. When finances become difficult, small businesses should consider scaling back instead of pushing forward or “doubling down.” Often making small changes can make a big difference in debt management.
Owners should avoid using personal assets to start or develop a business. Retirement funds, personal savings, and home refinancing should never be an option for business financing. You should protect yourself by forming a separate entity and managing taxes, funds, and loans separate from your own finances.
A Business Bankruptcy Lawyer Can Help You
If you are dealing with a difficult situation in your business with finances or debt management, you may be considering a business bankruptcy. You have many options to consider. You may seek to close your doors through a Chapter 7 bankruptcy or reorganization under a Chapter 11 or Chapter 13. These types of bankruptcy can help you with debt management to protect yourself and your future.
When making difficult decisions about business bankruptcy, you need an attorney with personal experience. Our lawyer has dealt with her own bankruptcy and has helped countless clients through the process. Call The Law Office of Diane Anderson today at 530-626-6441 to find out how we can help you.