The economy is tough and businesses are struggling. Many of them are forced to file bankruptcy. If you own a business that is on the verge of following in their footsteps, here are 10 things to think about before making the final decision.
10. Is bankruptcy your only option?
Have you considered all other alternatives? Have you tried to negotiate a feasible repayment plan with your creditors?
9. Must the business close or is there a possibility it could be salvaged?
Sometime a business just needs more time before it can become profitable. You need to know if that is true in your case so you can decide which type of bankruptcy is right for your situation.
8. If there is still potential, have you created a feasible plan to make your business become profitable?
7. Do You Have Enough Money to Pay for a Chapter 11 Bankruptcy?
If you want to continue operating your business, you will need to file a Chapter 11 bankruptcy, which isn’t cheap. You will also need a bankruptcy attorney, because Chapter 11s are complex.
6. Is the management capable of guiding the business through reorganization?
Even if you believe your current management is competent to handle the transition, your creditors may not, and you may need to hire a temporary consultant.
5. Have you or others personally guaranteed any business debts?
If so, you should be aware that a business bankruptcy would not protect you from that liability.
4. Are you facing an urgent, immediate problem like eviction or utility shut offs?
3. Are you prepared to expose the business bankruptcy to the creditors and the court?
You will not be given privacy when you file bankruptcy.
2. Are you willing to comply with the restrictions placed on a business in a reorganization bankruptcy?
1. The most important question is: Have you talked to a business bankruptcy attorney?
The most important thing you can do when facing a business bankruptcy is to discuss your situation with an experienced attorney who specializes in bankruptcy law. The attorney can help you look at all your options, answer your questions, and guide you as you make this vital decision. Many Boston law firms do not charge for an initial consultation to help evaluate your position. Law firms in Boston are familiar with frequently changing bankruptcy laws and could be your best protection against total loss.