The Administrative Office of the United States Courts, on behalf of the Judicial Branch of the United States Government, sadly reported an uptick in business bankruptcy filings in the past year. Specifically, this rose 29.9 percent, from 13,125 to 17,051 filings in the year ending September 30, 2023. Unfortunately, you may find your business in a financial state where it joins this statistic. Read on to discover how to file for bankruptcy as a business owner and how a seasoned Rockland County business bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can take you through each step of the process.
As a business owner, how do I know which business bankruptcy type to file for?
Before all else, you must select a business bankruptcy type that best suits your financial state and the overall outcome you wish to reach. Namely, there are Chapter 7, Chapter 11, and Chapter 13 business bankruptcies.
For one, Chapter 7 business bankruptcy may be in your best interest if your company has debts that outweigh its assets. In other words, this is best if your company is in the process of closing or already closed. This is because this bankruptcy type takes your remaining business assets and liquidates them to pay your remaining debts. Ultimately, this may relieve some of your liability with your personal guarantees.
Secondly, Chapter 11 business bankruptcy may be most useful if you need to reorganize your business debts into a more manageable payment schedule. In other words, this is a better option if you wish to keep your company’s doors open, retain your employees, and run operations as usual. Of note, there are no debt or income requirements to qualify for this bankruptcy type.
Last but not least, Chapter 13 bankruptcy is technically categorized as a consumer bankruptcy type. However, you may be eligible to incorporate your business debts into these proceedings if you are a sole proprietor with a regular income. That said, your Chapter 13 bankruptcy may function similarly to a Chapter 11 business bankruptcy, with the key step being following a court-approved repayment plan.
Do I need an attorney when filing for business bankruptcy?
Understandably so, even with conducting plenty of research, you may still be unsure which business bankruptcy type to file. With this being a pivotal decision for you and your company, you may feel all the more pressured to choose wisely.
For this reason alone, it is strongly recommended to consult with an attorney who may know exactly which business bankruptcy type can offer the maximum relief. What’s more, they may even conclude that you do not need to file for bankruptcy at all, but rather you are better suited for an alternative financial strategy.
In conclusion, there is no time like the present to kickstart your business bankruptcy petition. So, at your earliest possible convenience, please get in touch with a competent Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq.
