If Your Business Is Going Under, Consult A Chapter 11 Bankruptcy Attorney

It is a dream of many people to own their own business. The idea of working for themselves, setting their own hours and selling products or services in which they are personally interested sounds highly desirable. What most individuals don’t realize, however, is the amount of responsibility that comes with running their own business. From product sourcing to marketing to sales, accounting, and taxes, there are many responsibilities involved in running a company which take time, and proper knowledge, to perform. Small mistakes can lead to major problems for the company’s viability.

Those who aren’t prepared to take on or outsource the responsibilities find out fast that they have bitten off more than they can chew. People who didn’t enter with a good and solid business plan quickly find themselves in trouble- and many times, this trouble ends up being financial. When a business owner finds himself in dire straits, they should consult a chapter 11 bankruptcy attorney and find out what their rights under federal law are before just giving up on the business.

What exactly is chapter 11? In general terms, this is a form of financial reorganization which typically allows companies to continue to function while they follow debt repayment plans generated by the court and the company’s creditors. The theory here is that otherwise viable businesses are allowed to continue to operate because they will generate revenue, protect jobs, and be able to pay off creditors over time. Selling off the assets of the company to pay debts is a possibility, but it may not satisfy all of the indebtedness, and could force a business, small or large, to close its doors. In many cases, a reorganization which allows for a repayment plan that everyone agrees to makes more sense than closure of the business.

Chapter 11 can also, at times, be used by individual consumers. This would be in situations where the individual’s income was higher than the limits that are set in other types of insolvency, like 7 and 13. For those without businesses, this isn’t typically recommended as it is far more complex and expensive to pursue than other types. In addition, as you can find out from a chapter 11 bankruptcy attorney in a free consultation, the percentage of successful cases isn’t very high.

In small business cases, the assets of the company as well as the assets of the owner are at risk. These assets can be used to pay creditors or the owner may be forced to file for personal insolvency protection. Because of this, consulting a chapter 11 bankruptcy attorney is recommended. Though one can file for insolvency on their own using the forms and information found via the internet, the laws surrounding this legal protection are very complex. A Chapter 11 bankruptcy attorney has an in depth understanding of the laws and can explain how filing will affect the business owner as well as the company. After all, a chapter 11 bankruptcy attorney is paid to work in the best interest of their client, and can protect their client as much as possible.