Experienced Small Business Bankruptcy Lawyer In Middletown
Running a small business is challenging. Sometimes, despite your best efforts, financial difficulties can become overwhelming. If your business is facing mounting debt and potential closure, understanding your bankruptcy options is crucial. The attorneys at Hurley Law routinely guide small business owners through the complexities of business bankruptcy, helping them make informed decisions and navigate the process effectively. Here’s a breakdown of the primary bankruptcy chapters relevant to small businesses:
Chapter 7 Bankruptcy (Liquidation)
Chapter 7 involves the liquidation of business assets to repay creditors. The business must cease operations. This is often a last resort for companies that have tried other options and made the difficult decision to close their doors.
One benefit is that the liquidation is handled by a bankruptcy trustee and done in an orderly manner. During the liquidation process, the business owners do not have to worry about new lawsuits being filed or trying to negotiate with various creditors at once. This process can give you peace of mind and predictability through the liquidation process, compared to trying to liquidate the assts on your own through a non-bankruptcy process.
Chapter 7 business bankruptcy is often utilized when the owners of the business have personally guaranteed certain debts of their company. By liquidating the assets in an orderly fashion, any personally guaranteed debts may be paid down, reducing the balance that the owner is personally obligated to make up.
Chapter 11 Bankruptcy (Reorganization)
Chapter 11 allows a business to reorganize its finances and operations while continuing to operate. A plan is developed to repay creditors over time, often involving reduced monthly payments and discharging debt at the conclusion of the repayment plan.
Chapter 11 is a good option for businesses that still earn money but just need some breathing room to become profitable again. Payment plans can be up to ten years in some cases.
Not every struggling business is a good candidate for Chapter 11 bankruptcy. The process is very complicated and expensive. The Bankruptcy Judge, Trustee, and your creditors will closely scrutinize every aspect of your business operations to ensure the company is paying back as much debt as the company can reasonably afford to pay. Further, the professional fees for attorneys, accountants, and other financial advisors can offset the value gained by the reorganization plan.
Subchapter V of Chapter 11 (Simplified Reorganization for Small Businesses)
In 2019, Congress created a new type of Chapter 11 bankruptcy case specifically for small businesses, Subchapter V offers a streamlined and less expensive version of Chapter 11. It simplifies the process and provides additional tools for reorganization. Subchapter V is faster and less expensive than traditional Chapter 11. But it is limited to companies that have only $3,024,725 of total debt.
Which Option is Right for Your Business?
The best bankruptcy option for your small business depends on many factors. Business bankruptcy is one of the most complex areas of law. Only an experienced attorney with knowledge of bankruptcy law and business law can advise you on the best solution.
Attorneys at Hurley Law possess the skills and experience to be able to advise small business owners of all of their bankruptcy options. We can fully analyze your business income, assets, debts, and future projections, to determine the path that will be the most successful for you and your company.
No matter if your business is located in Dayton, Cincinnati, or anywhere in those surrounding areas, we are available to advise you and represent you in the Bankruptcy Courts. Don’t face your creditors alone! Contact us today at 513-318-9893 or through our contact form for a free confidential consultation.