In the current times, with COVID-19 sweeping the nation and crippling the economy in many places, small businesses everywhere are struggling. If your business is one of those that is experiencing the struggle, you may be weighing your options and considering closing your doors permanently. When you are thinking about doing that, the idea of bankruptcy may be also looming off in the distance. Get to know some of the important facts to be aware of when you are thinking about filing for small business bankruptcy. Then, you can better determine the right path for you and your small business.
There Are Different Ways to File Bankruptcy as a Business
As a business entity, there are different ways to go about filing bankruptcy. In one scenario, you may be able to continue doing business, and in the other, you will liquidate and get rid of everything.
These two different types of bankruptcy are Chapter 11 (reorganizing the business) and Chapter 7 (liquidating the business). If you are thinking about closing your doors permanently, then Chapter 7 is likely your go-to. But you may be able to keep your business operational if you choose Chapter 11.
Chapter 11, though, assumes that with restructuring, your business is capable of paying off debts that are owed on the business. In Chapter 7, you will be selling off inventory, equipment, and assets to pay what you can of the debts.
You Should Definitely Use a Lawyer
If you decide that it is in your best interest to move forward with a bankruptcy, the process may seem very simple at first. All that the courts require immediately is a form and a filing fee.
However, once the bankruptcy is filed, you will have to send many documents to the courts and ensure that you disclose everything that should be disclosed to the courts in order to process your bankruptcy request. This can be quite difficult and complicated.
Because of this, you should always work with a business bankruptcy lawyer to help you with the process. It would be best to hire them before you even file that initial form. They will let you know exactly what information you need to compile and gather for the courts and look everything over before submitting it to ensure you are providing accurate information and getting everything necessary turned over.
Now that you know a bit about filing for business bankruptcy for your small business, you can be sure to hire a business bankruptcy lawyer right away. Contact a law firm like Kasen and Kasen PC to learn more.