Things to Consider when Contemplating Bankruptcy

Are you in a situation where you think that it is time to declare bankruptcy? Have you tried talking with your creditors but they just won’t let you? Is your credit rating low and you are thinking that maybe it is time to file for bankruptcy and take back control of your financial life? If the answers are yes, no or maybe you can negotiate with your creditors then maybe bankruptcy is the answer for you. Visit www.floridabankruptcyattorneys.net for more information.

First you need to understand what a small business bankruptcy is and how it works. The Small Business Administration or SBA works with small businesses in the United States. When a small business fails it can file for bankruptcy in order to restructure and/or pay off some of its debts. One option that may be available to it is to repay a portion of its debts and continue operating under a new name. A new set of owners could be interested in purchasing your assets. In some cases an owner might offer to settle the debts for less than what you owe.

 

Another option available to a small business bankruptcy is to file for insolvency and become sole proprietor. You will then be in full control of your finances. Although you won’t have any debts you won’t have sole ownership of your business and all the assets will go to the bankruptcy trustee who will liquidate your assets. As stated before, this is usually the best option for small businesses that are struggling. Of course if a bankruptcy is inevitable then you must choose what is best for you and your family.

 

Other small business bankruptcy options include selling a part of the company or the entire business entity. This is usually referred to as seller financing and can be done through a bankruptcy lawyer. You may be able to sell your entire business entity and lease the assets that you don’t need. Most buyers are very anxious to purchase any part of a business and so a portion of it may not be necessary at all. If you decide that selling part of the business entity is the best option, seek professional help from a bankruptcy attorney.

 

bankruptcy attorneyPerhaps the most appealing option available to small business owners is to incorporate their business entity as a sole proprietorship. To do this you must file an article of organization form with the appropriate county courthouse. The advantage of a sole proprietorship over a corporation is that you are not personally liable for your business debts. With a sole proprietorship you will also enjoy the benefits of a limited liability vehicle (LLC).

 

There are three types of small business bankruptcy, chapter 13, voluntary bankruptcy, and debt settlement. Each of these has its own distinct characteristics that make them unique. Most small business bankruptcy attorneys will be able to explain each type of bankruptcy in detail. Knowing which bankruptcy option is best for you will require the assistance of an attorney. If you do not have an attorney yet, begin searching for one as soon as possible.