Fighting for Your Small Business
Any small business owner knows that during tough times the threat of financial failure can be overwhelming. Especially when the national or local economy is down, small business owners may struggle to break even and avoid growing debts. Sometimes large debts become unavoidable and a business owner must decide whether it is better to end the business or to try to save it.
If you are a small business owner struggling with outstanding balances, a Milwaukee bankruptcy lawyer from the DeLadurantey Law Office, LLC may be able to help. To learn more about your options, call us today at 414-377-0518.
Business Liquidation
Most people are familiar with Chapter 7, possibly the most dreaded form of bankruptcy for a business owner. If you believe that your business is too far in debt to be saved by restructuring your finances, you may want to file for Chapter 7. This form of bankruptcy liquidates a business and distributes the assets to creditors to pay off debt. Unfortunately a business that files for Chapter 7 has no choice but to go out of business.
Business Restructuring
If, however, you believe that it may be possible to save your business with some financial help, you may want to consider filing for Chapter 11 or Chapter 13 instead. Chapter 11 is a restructuring bankruptcy under which a company reorganizes and drafts a plan for how it will pay off its debts to creditors.
Once the court approves the plan, the business can begin to take action specified in the plan to pay back debts over a period of time. This is a much more drawn-out process than Chapter 7, and you may spend several years creating a plan and paying off debts, but if you believe that your business can become profitable again, this may be the best course of action.
Chapter 13 versus Chapter 11
Chapter 13 is different from Chapter 11 in that it is typically used by consumers, not businesses. However, small businesses are known to sometimes file for Chapter 13, especially if the business is a sole proprietorship. Many people who own sole proprietorships have mixed personal assets with business assets, so by filing for another type of bankruptcy the owner’s personal assets may also be put in jeopardy.
The advantage to Chapter 13 is that it provides certain protections for some property, including personal property, so that it cannot be repossessed or foreclosed on during the bankruptcy process. As with Chapter 11, you will create a repayment plan based on the amount of money that you owe and the amount of money that you can afford to apply towards your debts. Over time you will pay back creditors based on the approved repayment plan, typically over a period lasting 3 to 5 years.
Contact Us
Making the right choices for your struggling company can be an overwhelming task. To learn more about the options available to you to save your small business from long-term debt, please contact the experienced Milwaukee bankruptcy attorneys at the DeLadurantey Law Office, LLC today at 414-377-0518.