Should I file for Bankruptcy or Just close the doors?

Small business owners all over America are asking this question.  The answer depends on several factors, but here are some keys:

  1.  If your business is still profitable, that is its collected income exceeds the cost to produce that income, then Bankruptcy may offer a viable way to obtain relief from debt and keep your small business going.
  2. If your business is not profitable because there is just no more market for what you sell or do, then you should consider bankruptcy if you have any personal guarantees of debt, leases, or other sorts of contracts.  Otherwise, walking away may be just as effective for you.
  3. If your business could be profitable if your access to liquidity, cash, had not been cut off by a lender, then Bankruptcy can definitely help you.

 

The Small Business Reorganization Act eliminated the laws that formerly required an owner to choose between finding and putting in New Money, selling off the business, or having to pay debts in full over the term of a plan.  The new provisions are designed to help small business owners keep their businesses and obtain actual relief from many debts.

Before you decide what to do, it is wise to obtain helpful advice from professionals who know your options.

This article is written by an attorney at Attorney Donald Wyatt PC. Always consult an attorney before making any legal decisions. To make an appointment today, please click here to contact us.