Small business owners whose businesses are in financial trouble often wonder whether bankruptcy may be able to help them. In many cases, the fear of losing the business they worked so hard to build or the perceived cost associated with filing for bankruptcy results in inaction. Fortunately, there are many ways that a business attorney can help small businesses, many of which allow a business to continue to operate. Some of the ways that meeting with a business lawyer Abingdon, VA trusts can help small businesses are detailed below.
Evaluate Your Business’s Financial Situation and Determine Your Options
While bankruptcy may be an option for your situation, it is certainly not always the best course of action. In addition, there are many alternatives to bankruptcy that may be able to improve a small business’s financial situation. A business attorney will thoroughly evaluate your situation and advise you as to your options.
Negotiate with Creditors
In many cases, the involvement of a business attorney can result in informal resolutions to past due obligations through the process of negotiation. This often occurs because once an attorney gets involved, creditors may start to worry that the debtor-business will file for bankruptcy, which may mean they get nothing.
Additionally, business attorneys who are familiar with negotiating with creditors often are able to bring a new perspective to the relationship that may allow for more flexibility than if a business owner represented the business himself or herself.
File for Bankruptcy
Sometimes, bankruptcy is the most appropriate course of action to take. There are various kinds of bankruptcies available, including those that liquidate all of a business’s assets and cease operations, such as Chapter 7, and those that allow the business to continue operating as a debtor-in-possession. Your business attorney will determine which is right for your business and in light of your long-term goals.
Importantly, the paperwork involved in filing for business bankruptcy can be complicated and any error or omission may result in your petition being rejected by the court. Retaining a business attorney familiar with representing businesses in bankruptcy proceedings will ensure that your filing goes as smoothly as possible and that your business obtains all of the protections and benefits afforded by the U.S Bankruptcy Code.
Contact a Business Lawyer Today to Discuss Your Legal Options
There are many options available to small businesses that are experiencing financial distress, many of which could keep them operational while reducing their recurring debt obligations. For this reason, anyone who owns a small business that is having financial problems should discuss their situation with an experienced business attorney.
Thank you to our friends and contributors at The Law Offices of Mark T. Hurt for their insight into business law and finances.