No one starts a business expecting to have to file for bankruptcy, but it may be the best option for several companies throughout the country. Most people believe that there is only one cause for businesses to file for bankruptcy: financial difficulties. The truth is that it isn’t always that easy.
The choice to file for Chapter 11 bankruptcy, often known as corporate bankruptcy, is a major one. It will have long-term consequences for your business, and we at The Law Offices of Paul Y. Lee advise you to consider it carefully before concluding it is the best option for you. There may be a better alternative, such as filing Chapter 7 or Chapter 13, depending on the facts about your firm, such as how you’re formed, how much debt you have, and how you anticipate the business moving ahead in the future.
You could even be able to reach an agreement with your creditors. When you deal with The Law Offices of Paul Y. Lee, you can trust that you’ll be working with a skilled legal team that will carefully evaluate your choices and provide you with the information you need to compare them. Read on to learn about the three scenarios in which filing Chapter 11 may be appropriate, and then contact us at 888-748-0025 so we can assist you with determining the best course of action for your business.
You’re a business that isn’t a single proprietorship
Certain types of business organizations (such as LLCs and corporations) are prohibited from entering Chapter 13 bankruptcy under federal law. As a result, for a business owner who isn’t a single proprietor, Chapters 7 and 11 are usually the only alternatives.
You’re searching for a way to make money through lawsuits
Companies file Chapter 11 for a variety of reasons, one of which is that they have been threatened with or served with lawsuits. If the cost of legal bills is putting a strain on your business, Chapter 11 will usually put an end to any ongoing lawsuits. This is owing to the respite provided by the “automatic stay.” It’s important to remember that filing isn’t just for the purpose of avoiding litigation. If that’s the only reason, your bankruptcy will very certainly be dismissed, and you’ll be back where you started.
You want to keep your business afloat
A liquidation bankruptcy, whether filed by an individual or a business, is known as Chapter 7. While an individual’s personal property is excluded from this form of bankruptcy, companies are not. When a company files for Chapter 7, all of its assets are liquidated, and the company is forced to close. As a result, Chapter 7 may be a good option if you don’t want your business to continue operating. If you do, Chapter 11 is probably a better choice.
Regardless of how you choose to go with bankruptcy, it may be a lengthy and difficult procedure. You require the assistance of a seasoned specialist. The Law Offices of Paul Y. Lee is where you’ll discover that expert. For a free bankruptcy consultation, call 888-748-0025 today. We can discuss your issue with you and provide the best options for going ahead.