As a small business owner, you may wonder when it is time to throw in the towel and file for bankruptcy. The truth is that bankruptcy does not have to be the end of the road for your business. In fact, your business can continue on and build back stronger than ever with the help of bankruptcy.
When to File for Bankruptcy
The feeling of overwhelm with bills and operations in a small business can lead you to consider bankruptcy. So when is the best time to file?
1. No Solutions Toward Getting Ahead of Debt: If you are unable to pay your never-ending stack of bills, it may be time to start over. You can consolidate loans and even negotiate different terms with each creditor. But if you are still in the red, you need to make the call sooner than later to file for bankruptcy.
2. Protect the Business: Filing for bankruptcy is often the means by which a business can stay in operation. It may not make sense to you now, but your business can survive the filing with Chapters 11 and 13 bankruptcy. Then, you can slowly build your business back up to making money and thriving.
When you get the timing right with bankruptcy, you will have a chance to continue your business. Your employees and customers will still get to benefit from your products and services.
The Difference Between Chapter 7 and Chapters 11 and 13 Bankruptcy
Chapter 7 bankruptcy is only available to some small business owners. In this case, the business will need to shut down completely. However, if you own a business and do not intend on keeping it in operation, then you may look into seeing if you qualify for Chapter 7 bankruptcy.
On the other hand, Chapters 11 and 13 allow you to keep your business operating as you negotiate payments to your creditors. The bankruptcy filing will protect you from debt collectors.
Make vital decisions about bankruptcy with the help of Miles & Hatcher, LLP. We can guide you through bankruptcy and ultimately pave a path toward rebuilding. Call to schedule a free consultation: (909) 481-4080.