As a business, it’s important to pay attention to economics, listen to your customers, be one step ahead of the competition, allow yourself to grown and evolve in your business model and be passionate about what you do. Unfortunately for many business owners in America, the concept to running into the ground financially isn’t all that far off. With a wavering economy, one wrong move, or even more simply, a loss of interest in your goods or services due to people being unable to afford them can put a business feet up in the water of debt. We all make mistakes, but as a business, mistakes cost money, and money pays loans, and when you can’t pay your debts, your fiscal security can be greatly threatened.
Luckily, if you’ve found that your business isn’t generating enough profit to support the weighty loans that finance it, and you’re being harassed by creditors, and even threatened to foreclose, there is hope. Bankruptcy is perhaps a business’s worse nightmare, but it’s something that every business owner should know about.
Unforeseeable things happen, people get hurt, lawsuits occur, the economy dives and comes back up, wares are damaged, robberies happen; there are a near infinite number of situations that threaten the financial aspect of every business, but there are just a few ways of clearing debt and preventing your business from running into the ground with residual, lasting debt.
A professional business bankruptcy lawyer, such as John A. Hixson, can guide you through the complex bankruptcy court system, and inform you of the finer points of declaring bankruptcy as a business. There are two primary chapters of bankruptcy that most businesses qualify for: chapter 7 and chapter 11, the latter of which can be seen as a version of the benefits and structure of a chapter 7 bankruptcy, but tailored to meet the needs of a business.
Where in a chapter 7 bankruptcy case, a bankruptcy court will appoint a trustee to supervise the liquidation of assets, in a chapter 11 bankruptcy, the owner of the business may be appropriated the role of trustee, and can be held responsible for selling the business and all of its assets as a means of repaying creditors as much as possible. Should the profit made by selling the business exceed the cost of repayment, then what remains is distributed to the owner or co-owners. This gives you, as a business owner a chance to eliminate debt and salvage what you can from your business.
Also, it should be noted that once you have successfully filed for bankruptcy, an automatic stay will be placed on your business. This prevents your creditors from seizing your business or assets for the duration of the proceedings.
This is a fairly brief but exceptionally complicated process, so legal advice is a must. The expert counsel of John A. Hixson has been sought out by hundreds of failing businesses, due to his over two decades of professional bankruptcy law experience. So if your business is looking at bankruptcy as its final option, give us a call today. Act now!