Some form of small business bankruptcy may be necessary if your business is having debt problems that you can't control.
Here are some options:
Filing for Chapter 11
This is the most common way for a business to recover if there's a determination that you could still pull in enough money to survive. Reorganization of your finances will be essential in this case, along with slowly paying back some of your debts over time.
A careful approach and concentrated plan to continually bring in income can mean getting your small business back on its feet within a short number of years.
Chapter 13 as an Alternative
Did you know a sole proprietorship can also file for Chapter 13 bankruptcy? Most people think that Chapter 13 is reserved only for a consumer, but the two can be intertwined in the small business world. In this scenario, if you have a business out of your home or from a small office or store, filing Chapter 13 can help you recover from debt. This gives you plenty of leverage in being able to pay back debts over a designated time while staying in business.
You have to work out a financial plan that will enable you to pay back some of your debts over a set number of years determined by the bankruptcy court. Most positively, you can retain business ownership while allotting part of your budget toward financial recovery.
Chapter 12 for Farmers and Fishermen
Do you operate a farm or fish for a living while dealing with financially tough times? If you're falling into debt and still expect to bring in income, the little-known Chapter 12 option is a good bankruptcy alternative. Through this plan, you can work out a shorter time plan for paying back debt. And that's usually three to five years, depending on your case. However, it might be a challenge to work out a payment plan when farming and fishing have such unexpected curves to financial success. It may be a riskier move if you think there's no chance of future financial recovery.
No matter which bankruptcy chapter option you choose, working out plans to pay back debts will always be in your best interest. Unless you think you can restart a business after Chapter 7 liquidation, always consider the payment options to avoid the probabilities of not being able to recover for many years.
You need a good bankruptcy lawyer to navigate these complex paths. Look no further than the Law Office of Robert W. Kovacs. Representing business owners and individuals from Framingham and Worcester, Massachusetts, Mr. Kovacs has vast experience dealing in every potential bankruptcy scenario to help relieve you of stressful debt. Contact us to help your small business get back to being in business so the small business economy can recover.