Damage to the economy has sent strong companies toward financial ruin. A small business that was already struggling may find its current debt load insurmountable. As you deal with your overwhelming debt, take time to consider what you want for the future. Understanding both where you are now and where you want to be could be the key to deciding whether your small business should file for bankruptcy.
Do You Want to Close Your Small Business?
Some small business owners are ready to move on. They just need to tie up some loose ends and deal with their business debts.
Most people in this situation will consider filing a Chapter 7 bankruptcy. If you have few assets and little income but lots of debt, a Chapter 7 might work. On the downside, you could lose some assets as the bankruptcy administrator reviews ways to pay or discharge what your small business owes.
Do You Want to Continue Operating?
If so, then a Chapter 13 or Chapter 11 might work.
Chapter 13 could help individuals who do not qualify for a Chapter 7 or don’t want to liquidate. This type of bankruptcy could be especially appropriate for sole proprietorships and companies where the owner’s assets are involved with the business debt. Also, business owners who file Chapter 13 and complete their repayment plan can reorganize their business instead of terminating it.
Finally, there’s Chapter 11. Until recently, this type of bankruptcy was best used by large companies that want to reorganize. In fact, you may have heard people refer to Chapter 11 bankruptcies as Chapter 11 reorganization.
However, the Small Business Reorganization Act (SBRA) enacted during the Trump administration provides another option to small business owners thinking of bankruptcy. The SBRA allows businesses to reorganize in a more cost-effective way than traditional Chapter 11 bankruptcies. Still, Chapter 13 might be the best option for sole proprietorships and other small business entities.
Call to Discuss Whether Your Small Business Should File for Bankruptcy
Attorney Leslie Craft has the experience you need to deal with bankruptcy and traffic violations. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives. Consultations are free and only take about 30 – 45 minutes of your time. Your options may surprise and even excite you!
To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at firstname.lastname@example.org. My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City,
Bankruptcy Doesn’t Have to Be a Painful Process.