If you a business owner and considering filing for bankruptcy, the good news is that there are several options to choose from.  Depending upon whether you qualify for bankruptcy, you may be able to file under Chapter 7, 11 or 13 of the Bankruptcy Code.   In the event that you are sole proprietor or own a small business, it is important to understand the aforementioned options and which action may be right for you.  Otherwise stated, the type and size of your business as well as the amount of debt may warrant choosing a specific bankruptcy chapter over another.  That is why it is important to turn to a qualified bankruptcy attorney to help evaluate your case and assist you in deciding the type of action that best fits your needs.

Accordingly, it is crucial to know the differences between the different forms of bankruptcy before doing anything else.  This way, you will be able to decide which business bankruptcy action is right for you.   These are as follows:

  • Chapter 13.  For those that do not meet the income eligibility requirements under Chapter 7 liquidation bankruptcy, Chapter 13 may be a useful alternative to address your company’s financial situation.  Overall, this is often ideal for businesses in that it allows you to develop a repayment plan that is enforced and maintained by a bankruptcy trustee.
  • Chapter 7.  Also known as liquidation bankruptcy, this allows you to completely liquidate the assets of your business in order to pay off your creditors.  Keep in mind that when a business is considering a Chapter 7 bankruptcy, it typically means that it will no longer remain in operation once the action is finalized.
  • Chapter 11. This type of bankruptcy is aimed at assisting larger corporate entities in keeping themselves afloat. Specifically, it allows a company to develop a debt reorganization plan that addresses their financial situation.

When reviewing your business bankruptcy options, there are several questions you should consider when choosing which one works best for you.   These are:

  • Does my company have sufficient resources to reorganize?
  • Is there enough manpower to run my company yet adequately maintain a reorganization plan?
  • Do I have a market strong enough to keep my business in operation?
  • Should I disclose my company’s financial condition?
  • Is my business able to afford a bankruptcy reorganization plan?
  • Should I just close my business and start over?

While some of these questions may be easy to answer, others require the assistance of a qualified bankruptcy attorney for support.  When choosing the right Kansas City bankruptcy attorney, it is crucial to work with someone who is experienced in bankruptcy and knows the ins and out of the process.

Contact me now to learn more about your business bankruptcy options  

If you own a business and are thinking about filing for bankruptcy, contact my office today for a free confidential consultation.  I will take the time necessary to evaluate you business’ financial situation and offer you the most practical solutions that are uniquely tailored to address its needs.