Is Bankruptcy a Last Resort?

working in office

Bankruptcy Advice……..

Filing for Bankruptcy protection is called getting a “Fresh Start”.  I also tell people that filing a Bankruptcy case is a “Last Resort”.

Unless you are facing an absolute emergency such as a foreclosure sale, warrant of eviction, or bank restraint involving a large sum of money, every client should think long and hard before filing a Bankruptcy case and should seek advice from both an accountant and a Bankruptcy attorney.

The American Bankruptcy Institute suggests seeking out a Bankruptcy attorney when these warning signs arise:

  • Creditors have obtained judgments against you or your company
  • A bank account has been frozen
  • Your personal wages are being garnished
  • It is beyond your ability to pay down your credit card bills or medical bills

Experts also suggest the following:

  • Assess your total financial situation
  • Review your income and debt with your accountant
  • Review your credit report
  • Talk to a Bankruptcy attorney and understand the pros and cons of filing a Bankruptcy case
  • Open all of your mail. Know who is collecting against you and for how much
  • Never ignore a lawsuit, foreclosure or collection action

………and Business Law

Starting a new business?  Don’t go it alone.

I always recommend to my clients who are starting a new business to speak with anyone he/she knows who may have good experience and advice to give you before you open your new business.

  • Speak to people who are in the same business. They may be friends of the family or even future competitors. You would be surprised at how helpful small business owners are when discussing the ups and downs of owning your own business.
  • Spend a day or two with the business owner. See what it is like to actually conduct the business.  Ask as many questions as you can.   How much income can a business such as this make?  What is it like dealing with clients, customers, suppliers, landlords, utilities?

Speak with the following professionals:

  • Your accountant. She will tell you what business entity you need:  a sole proprietorship, a partnership, LLC, or corporation.  Your accountant will also advise you regarding payroll tax, unemployment tax and withholding taxes.
  • Insurance broker. Every business needs insurance.  Will you need fire insurance, liability insurance, contents insurance, Worker’s Compensation insurance, employment insurance, event insurance, malpractice insurance?
  • Your lawyer. A good lawyer will protect you from yourself.  Do you need a partnership agreement that sets out the division of labor and capital between you and your partners?  Do you need employment contracts, a commercial lease with your landlord?  Are you purchasing a corporation or only its assets?  What if you have a dispute with one of your vendors, employees, your landlord or your partner?


Simple advice for the new business owner….. Don’t go it alone.


As always, please feel free to contact me for a free consultation regarding your specific financial circumstances.

I have been practicing Bankruptcy Law, Business Law and Litigation for over 25 years.

The Law Offices of Allen A. Kolber, Esq. is a full service law firm that provides quality representation in the following areas:

  • Bankruptcy Law and Litigation
  • Business and Corporate Law and Litigation
  • Foreclosure Defense
  • Loan Modifications/Short Sales