It’s not uncommon for businesses across the country to run into financial problems from time to time. Sometimes businesses overextend themselves or they take a chance and make a financial bet that just doesn’t pay off. Whether big or small, bankruptcy is something that can happen to pretty much any company out there. Business bankruptcy attorneys are there to help owners realize their options and get back on the road to recovery.
There are different types of bankruptcy filings for different businesses in different circumstances. For instance, chapter 7 bankruptcy is generally used by smaller businesses or sole proprietors when they’re unable to reorganize their debt. This option will require a business to liquidate its assets in order to settle the debt owed to its creditors. As a result, the financial move usually means that the business has come to an end.
Businesses that are too big will have the option of choosing chapter 11 bankruptcy. Unlike chapter 7 bankruptcy, this particular option doesn’t require liquidation from a business. Instead, it is given the option of reorganizing itself and its debt by communicating with the creditors and arranging some type of repayment plan. Business bankruptcy attorneys can work with business owners in order to hatch out some type of settlement.
Although both these options are pretty straightforward, there are still a number of blunders that can be made. For instance, business owners shouldn’t make the mistake of giving certain creditors preferential treatment. An owner may decide to pay off a debt that’s owed to a friend, as opposed to a bank, before filing for bankruptcy. However, if this is found out by your bankruptcy trustee, they may demand that this payment be recouped and allocated between all existing creditors.
If you’d like more information about bankruptcy and what an attorney can do for you, consider visiting Stlbankruptcyfirm.com for details. Again, smaller businesses can choose chapter 7 bankruptcy to liquidate their assets and pay off their debt. Larger businesses may need to file chapter 11 bankruptcy in order to reorganize and make repayment arrangements. Also, avoid having a preference for certain creditors over others before filing for bankruptcy.
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