When you own a business, you may do everything possible to ensure success. However, times can be tough, and you may find that you’re struggling to stay afloat. Unfortunately, when the debt becomes too overwhelming, you may not know your options to help your company succeed. You may determine that bankruptcy can help you regain control of your finances. However, as a business owner, you must familiarize yourself with the different Chapters of business bankruptcy. The following blog explores your options and how a Memphis, TN business bankruptcy lawyer can help you through this process.
What Options Do I Have to File for Bankruptcy as a Business Owner?
If you own a business that is struggling financially, filing for bankruptcy may be in your best interest. However, it’s important to understand the different options. Generally, businesses can only file under Chapter 7 or Chapter 11.
Chapter 7 bankruptcy for business involves the liquidation of your assets. Essentially, they will sell your property and use the funds to repay creditors. Though this is generally the shortest option, almost all businesses that file for Chapter 7 will close permanently.
Another option is to file for Chapter 11 bankruptcy. However, this is a lengthy, complex plan in which your debts are reorganized to create a payment plan to repay creditors. It’s important to note while this can help keep your doors open, you may find that downsizing or cutting the cost of operations may be necessary.
It’s important to understand that if you are a sole proprietor, you may also be able to file for Chapter 13 bankruptcy. This is a form of personal bankruptcy eligible for sole proprietors because you and your business are technically the same. As such, your personal assets are liable under the business, and your business assets are liable under your personal finances.
How Do I Know Which Is Right for Me?
Because there are so many options to file for bankruptcy, it can be overwhelming to determine which option is right for you and your business. As such, it’s in your best interest to connect with an experienced bankruptcy attorney who can examine the circumstances of your case to determine which option is best for your unique circumstances and the needs of your business.
Not only can connecting with an attorney help you determine the best option for your needs, but they can also help you through the process of filing, which can be complex. If you make a mistake, it may result in your case being delayed or dismissed, both of which can severely impact your business.
When you need help filing bankruptcy for your business, the team at the Arnold Law Firm is ready to assist. We understand how overwhelming these matters can be, which is why we are dedicated to helping you every step along the way. Connect with our team today to learn how we can help guide you through these matters.
