If your business is treading toward a state of financial ruin, this may mean your livelihood is on the line. Not only might you stress about supporting yourself and your family, but you may carry the burden of worrying about how your employees will survive. Though not ideal, you may feel you have no other choice but to declare your business bankrupt. Read on to discover how a business owner can file for bankruptcy and how a seasoned Rockland County business bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help determine whether this is the best option.
How can a business owner go about filing for bankruptcy?
As a business owner, you may have two bankruptcy options at your disposal. Namely, there is Chapter 7 and Chapter 11 business bankruptcy.
In a Chapter 7 business bankruptcy, you may liquidate your business’s assets in an effort to pay off your outstanding debts. This may be your best option if your business debts significantly outweigh its assets. With this option, though, you must understand that your business will likely close as a result. This is unless your business is predominantly service-based and can survive your trustee selling your property.
Then, in a Chapter 11 business bankruptcy, you may restructure your business’s debt payments in a five-year plan while under the protection of the New York State bankruptcy court. This may be your best option if you still wish to conduct business operations and receive income for you and your employees during this time. You should know that sole proprietors rarely choose this option unless their debts exceed the Chapter 13 consumer bankruptcy debt limitations.
Therefore, you must carefully consider what outcome is ideal for your business, and what expectations your business can realistically handle, when choosing between Chapter 7 or Chapter 11 business bankruptcy.
How can a business owner know that they should file for bankruptcy?
Maybe, after reading this, you may start to realize that neither business bankruptcy option seems appealing to you. Or, you may attend a credit counseling session before submitting your bankruptcy petition and get discouraged from moving any more forward in this process.
Either way, with this, you may start considering other options for relieving your business’s debts that do not require the New York State bankruptcy court’s intervention. Specifically, you may attempt to restructure your business’s debts independently. This may be accomplished by negotiating with your existing creditors or by consolidating your debts into a single loan, among other tactics.
If you find yourself at a crossroads, please seek the sound advisement of a competent Rockland County bankruptcy attorney. Someone at The Law Offices of Allen A. Kolber, Esq., P.C. will stand by your side at a moment’s notice.
