Bankruptcy refers to a procedure that an individual or a business entity undertakes to repay outstanding debts — a proceeding that demands help from a bankruptcy attorney Fairfax VA. In laymen’s point of view, this word frequently implicates failure. But sometimes, declaring bankruptcy is the only viable way to help a business. The question is: When?
Your business is consistently losing money. When you run a business, expect to lose money at some point (especially when there are huge, temporary factors like an economic crisis). But if you see your business constantly losing financial resources, it’s time to take a step back and re-assess your situation.
Your business assets’ worth is not enough. Businesses will always have liabilities. But what matters is that a business’ assets are still worth more than the liabilities. If it’s the other way around — with your personal assets being on the risk of getting liquidated just to pay off debts — you should make your move and find means of recovering from your losses.
Like what any bankruptcy attorney Fairfax VA would advise, filing for bankruptcy is for emergency situations only. Before considering it, you might want to look into other ways of overcoming the financial hurdle you’re currently facing.
Consider contacting your vendors and property managers. Take note that their best interest (in most cases) is to help you out as they would gain nothing if you go bankrupt. You can further assess your business assets and sell what you don’t need. Last but not the least — make the most of your circle; contact family members and friends to help you out in this difficult time.
Three Types of Bankruptcy
Say you’ve already exhausted your options and have decided to declare bankruptcy as your last resort — you still have some decision-making to do. Depending on your business’ financial situation, you have three types of bankruptcy to choose from.
Liquidation. Available for sole proprietorships, partnerships and corporations, this option (stated in the US Bankruptcy Code Chapter 7) lets the business assets be distributed among the creditors.
Business reorganization. Used for corporations and partnerships, this option as discussed in the code’s Chapter 11, allows a business to restructure and come up with a plan on how to deal with its creditors.
Adjustment of debts for individuals. Explained in Chapter 13, this reorganization bankruptcy is an option for sole proprietors wherein they can submit a repayment plan — with the amount you need to repay depending on your income, your debt, and your properties’ worth.
Getting Help From a Bankruptcy Lawyer
Having a bankruptcy attorney Fairfax VA by your side certainly brings a lot of benefits. First off, he or she can help you conduct a thorough assessment of your situation and options. This is especially crucial if you’re new to the world of business and you don’t know to navigate all your options yet.
Once knowing that bankruptcy is your best option, identifying which type of bankruptcy comes next. Your lawyer will also help you with this one — with his or her assistance extending to the very end of the process: from filing the bankruptcy to representing in court, dealing with your creditors, and guiding you as to what to anticipate and do after the bankruptcy has been successfully completed.
Declaring bankruptcy has some benefits if you know what you are doing. At Bolger Law Firm, our bankruptcy attorney Fairfax VA will guide you through the process and ensure nothing goes wrong. Contact us today.