Being a business owner can be a huge responsibility. You are exposed to a variety of risks as a small business owner. When it comes to receiving a regular paycheck, you won’t have the support of an employer. If your business is in financial trouble, it’s likely that you are too. Owning your own business is risky as many businesses can fail. It can be difficult to accept this harsh reality.
Why Are Small Businesses Going Bankrupt?
Small businesses can close their doors for a variety of reasons. A business that is unable or unwilling to make a profit may eventually go bankrupt. Businesses can go bankrupt for many reasons, including a slower economy, poor business location, legal issues, sickness, divorce, or mismanagement. Many small business owners borrow money to help them start their businesses. A business owner’s ability to maintain a good financial standing with their bank loan providers may be affected if they are having financial difficulties. Due to the many challenges that small businesses face, financial problems can eventually lead to a bankrupt small business.
Should My Company File For Bankruptcy?
It can be difficult to decide when to file bankruptcy. Many owners of small businesses hope their business can recover from the loss of profits. It is important to weigh all options when considering your next steps. This is particularly true when making a decision about whether or not to file bankruptcy proceedings. It is a good idea to consider bankruptcy if you are at a high risk of losing personal assets to creditors. You may be able to protect and retain some assets through bankruptcy.
What Options Do I Have For Bankruptcy?
The type and size of your business will determine which options you have. It is almost always a good idea for you to consult a bankruptcy attorney when deciding if bankruptcy is the right option for you. Your business’s type and size will likely determine the bankruptcy chapter you should file. Solo proprietorships can choose between Chapter 7 and Chapter 13 bankruptcy filings. Chapter 11 is unlikely to be an option for smaller businesses. Chapter 11 is reserved for corporations with debts that exceed Chapter 13.
How Do I Start Bankruptcy Proceedings?
It is best to consult a bankruptcy lawyer before making any decisions. They can be invaluable in helping you navigate financial difficulties. They can help you decide if bankruptcy is right for you and which chapter to file.
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation. Click here to learn more!
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