Tips For Filing Business Bankruptcy

Posted on: 24 November 2020

Some former world-famous companies have had to file for bankruptcy. They once stood as pillars of their respective industries but found financial relief through bankruptcy after dealing with a turbulent economy. If your company is adversely affected by the economy or other factors, you will need to keep bankruptcy on the table as an option.

A good bankruptcy lawyer and a direct strategy will help you do this correctly. Here are some tips you should know about filing for bankruptcy.

1. Think about your circumstances and whether or not you need to file for bankruptcy

There are several reasons that might make a company want to file for bankruptcy. Some of these reasons include a turbulent market, bad business credit, poor internal decisions, and a subpar location putting a damper on customers and traffic. If you are dealing with any of these factors, bankruptcy protection can help you stop the financial waste so that you can minimize losses.

2. Consider the types of bankruptcy that you can legally file

If you are contemplating a bankruptcy filing, you should get to know the exact types that are possible. The possibilities that you can look into include Chapter 7, Chapter 11, and Chapter 13. Chapter 7 is a type of bankruptcy that liquidates your assets, particularly if you don't think that your company can recover. With Chapter 11, you file bankruptcy to buy you time to restructure and reorganize. This way, your business can make changes that will help it last. A Chapter 13 bankruptcy refers to creating a payment plan that buys you time. This way, you are able to appease your creditors while repaying your debts in a timely fashion.

3. Find representation and professional assistance

Always hire the assistance of a business bankruptcy lawyer that can assist you. These attorneys will help you decide on the kind of bankruptcy claim that you should file and can negotiate for you. One option you may have available when looking into hiring an attorney is visiting them in court representing someone else. That gives you the best idea of their capability and style. After observing different lawyers, you can schedule a consultation and ask them how they see your case moving forward.

Understand your obligations and what you're signing up for, and always ask the lawyers questions if you have them. For more information, contact a business bankruptcy lawyer so that you can consider your bankruptcy options.