Is your small business in severe financial trouble? Have you asked yourself if bankruptcy would help? There are several questions that you should ask yourself before you begin the process. Consulting with a small business bankruptcy lawyer will also give you the guidance and information you need.
What Type Of Business Do You Have?
A business that is classified as a partnership or a corporation is a separate entity from the business owners or the shareholders. This means that if a business is considered a partnership or corporation, it can file for a Chapter 7 or Chapter 11 bankruptcy on its own.
However, it is critical to know that a trustee can sue the business owners or partners if the assets of the partnership combined are not enough to pay off the debts. An experienced small business bankruptcy lawyer will be able to advise you on what to do based on your specific situation.
Proprietorships are different from partnerships and corporations. A proprietorship cannot file bankruptcy by itself; the business owner must file for bankruptcy. The owner can file either Chapter 7 bankruptcy, Chapter 11 bankruptcy or Chapter 13 bankruptcy.
Is Any Debt Secured?
Secured debt is a claim made by the creditor and is typically secured by a property lien. The creditor places a lien on property belonging to the business or business owner. The difference in the amount of secured versus unsecured debt the business has will go a long way in determining if reorganization of the business is possible after the bankruptcy discharge.
When you are considering bankruptcy, you must make sure that your creditors perfect all of your judgment liens. This means that the correct agency must record all liens properly. Having this information correct is necessary when you are trying to determine if your business is eligible to file for Chapter 13 bankruptcy.
Hiring a Small Business Bankruptcy Lawyer
Trying to decide if your business should file for bankruptcy may be overwhelming. The decision might possible be the most difficult financial business decision you will ever make. Fortunately, hiring an experienced small business lawyer will make the process less intimidating.
Is your small business in Georgia on the verge of financial ruin? Schedule a free consultation with us and let’s work together to find a viable solution to your financial situation.