Bankruptcy Legal Aid

Admin | January 11, 2012 | Comments Off

Bankruptcy Legal Aid

Bankruptcy Legal Aid

The advice of the accountants and bankers just didn't work. Despite small business efforts, the financial crisis has finally gotten the better of the business. Every day brings deeper debt with no end in sight. It is time to consider the decision no business owner ever wants to think about – bankruptcy. Bankruptcy is the 800 pound gorilla in the room that no one ever wants to talk about. But not talking about the situation will not make it go away or even make it any easier to cope with.

As a business owner bankruptcy is not something to work towards. But having a basic understanding of the process can help with the decision making. Closing a business is a heart-wrenching decision that has rippling effects that extend out to many other people and businesses. But bankruptcy can sometimes be the best decision – one that will actually keep the doors open. Federal bankruptcy laws were designed to protect both the debtor and the creditors. While still painful, bankruptcy is a better option than jail. It is also better if it is initiated by the business owner rather than by the creditors.

Forms of Business Bankruptcy

  • Chapter 7 is a total liquidation of company assets resulting in dissolution of the company.
  • Chapter 11 (for corporations) and Chapter 13 (for sole-proprietors) is a reorganization of the company. A re-structuring of the company’s debts allows the company to continue operating.

Find a Bankruptcy Attorney

If there is no way out of credit problems, the first step is to meet with a good attorney. Get a recommendation from an accountant. A preliminary consultation should not cost anything and will allow time to ask some basic questions. Make sure there is trust and confidence in the attorney selected. The attorney will help determine if bankruptcy is really necessary and if so what type of filing is best based on the circumstances.