As a business owner, you may have witnessed, firsthand, the crippling effects of a struggling economy, particularly when it comes to smaller businesses. Sometimes bankruptcy is the option that will relieve you of past burdens and provide you a way to get a fresh start. If your business has been in the grips of financial problems, the office of Brent George Law can provide some solutions for you.
Drowning in Debt?
Your situation is not unique. Businesses of all sizes felt the effects of the recently troubled economy. During this time many business owners made the difficult decision to file for bankruptcy. Some of the most common situations leading to this point included:
- Reduced customer and client spending
- Low revenue
- Reductions in lines of credit
- Cutbacks in other business sectors
- High debt loads and high interest
There are plenty of other reasons that a business may begin to struggle. These might include unforeseen natural disasters, criminal activities, or lawsuits. Whatever the causes behind your business struggle, the results are familiar to many business owners. Filing for bankruptcy may be an important step toward putting your business back on a successful track.
Which Type of Bankruptcy Is Best for Your Situation?
There are a few different options that may be appropriate for your circumstances:
Chapter 7 – This choice is often referred to as liquidation. If you don’t believe that there is any hope left for your business, then this option may be suitable. Available assets will be sold off in order to pay the outstanding debts. Other arrangements will be made to satisfy those debts that cannot be resolved with the remaining assets.
Chapter 11 – This option allows you to continue on with your business. You may find that you are operating under the close eye of a trustee, appointed by the court, and you will have to develop a reorganization plan. This is a complex process, but may resolve the majority, if not all, of your business troubles.
Chapter 12 – This bankruptcy procedure was developed specifically for family farmers or family fishermen. A repayment plan will be put into place in order to pay off creditors over the course of three to five years.
Chapter 13 – If your business is classified as a sole proprietorship, then you may face some difficult options with a Chapter 13. You’ll file a repayment plan, as with the other options, but if your personal assets overlap your business assets at all, then you may put your home at risk.
In order to determine which route will be the most fitting for your business struggles, visit with us at Brent George Law. When you face a future that seems complex with financial troubles, consider the new start that bankruptcy may provide. You may find that debt relief counseling provides you with hope for your future and a renewed sense of encouragement.