Business Bankruptcy: What Your Legal Advisor Wants You To Know Before Filing

Law Blog

There are several ways to protect a company from going under because of overwhelming debt. One of these is declaring bankruptcy. However, this process can be challenging and stressful, especially if you aren't aware of the steps to follow while filing. In such a case, consider working with a lawyer so that they can advise and guide you through the process. This way, you will not overlook anything or make mistakes that could make you fail to qualify for bankruptcy. Your lawyer will likely start by explaining the following facts so that you can know what to expect and how to facilitate a successful process:

You Can Consider Several Bankruptcy Options

Several bankruptcy options are viable, including chapter 7, which will liquidate your company assets to enable you to pay what you owe. You can also file chapter 11, which might be a better alternative because it will enable you to restructure your debts and make them more manageable. This is aimed at enabling you to repay your debtors without facing crippling financial challenges that might affect your business operations. Chapter 13 is also a feasible bankruptcy option for a struggling sole proprietorship business. It will structure your debt into affordable monthly payments. In any event, an attorney dealing with bankruptcy applications can help you determine the most appropriate bankruptcy type for your business. This will enable you to file a chapter that will lessen the burden.

An Attorney Will Offer You Invaluable Assistance Throughout the Process

An attorney provides invaluable assistance throughout the process to help you get the relief you need. They will likely start by preparing and filing a bankruptcy petition. This protects your business from creditor action until the court rules on your case. Your legal advisor will then assist you in gathering the documents needed when declaring bankruptcy. They also prepare a repayment plan to show how you intend to pay back what you owe. Your creditors and the court evaluate the plan before either approving or disapproving it. If the court approves your plan, you will be required to make monthly payments until the end of the period indicated in the repayment plan. The court may then discharge some of your debts after the end of the repayment period.

A bankruptcy lawyer can make the process of declaring bankruptcy smoother and less stressful. They take you through the filing process to ensure that you understand what filing for bankruptcy entails. Moreover, your legal advisor takes the necessary steps to enable your business to get relief from overwhelming debt. 

For more information, contact a local bankruptcy attorney


2 November 2022

Every Business Owner Needs to Be Well-versed in Law

While I took a few business classes in college, I left early to start my own business. I thought I had the knowledge I needed to become a great business owner and was eager to start my business. Soon, I had a new business that was actually performing pretty well in sales. Unfortunately, I hadn't taken any law courses in college, and I soon realized I made a few mistakes when starting my business that could cause me some legal trouble. Thankfully, a great business lawyer helped me correct my mistakes before I had any legal problems, but I then decided to take those business law courses. I want to help business owners and anyone else who would like to learn more about the law by starting a blog where I will share what I have learned and will continue to learn. I hope I can help you!