Law

Filing for business bankruptcy: Things worth knowing

Gone are times when bankruptcy was seen as the end of the road. Sometimes, a business may not perform as expected, and bankruptcy allows the owners and stakeholders to wind up operations and liquidate the business, which may open up new avenues. For filing business bankruptcy, a few basic steps must be followed, to keep up with regulations and compliance needs. If you are unsure of how to take these steps for your small business, your best bet would be to hire an experienced New York bankruptcy attorney. A bankruptcy attorney can guide you through the process and help with every step. 

Options to consider

  1. Just because your business is financially distressed, it doesn’t mean bankruptcy is the immediate solution. Sometimes, it may be possible to handle the debts in different ways, so that bankruptcy doesn’t become apparent. Talk to your lawyer to know if any of the alternative debt options would work for your business.  
  2. The second option is Chapter 7 bankruptcy, which allows owners to wind up the company and resolve the existing financial obligations. 
  3. The third choice is that of Chapter 11 Bankruptcy, which isn’t the end of the road, but allows a company to restructure their debts in through sustainable payments. This can be one of the better solutions for small and mid-sized businesses that do not want to shut shop right away. 

Talking to a bankruptcy attorney

Filing for bankruptcy may not be as easy as it seems on paper. You will need financial records, paperwork, and all other information that can prove the company’s financial distress. Working with a bankruptcy attorney can help in keeping unwanted mistakes at bay. They can guide you on the intensive paperwork involved, and you can prep the documents accordingly. Also, if you are confused as whether you should file for Chapter 11 bankruptcy or Chapter 7 bankruptcy, your lawyer would be able to guide on this. Make sure that you hire an attorney who knows bankruptcy requirements in depth, and they should be available and accessible to answer your questions and help with the process.

Final word

Your business is in financial distress, and with bankruptcy, you may be able to try other options, without feeling burdened with debt. Talk to an experienced attorney about your options and select one that works best for your business interests. At the end of the day, you would want to reorganize the situation, which may mean winding up the company when other choices are not available. 

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