The last 7 years have not been easy for businesses in Northern Virginia. Small businesses, start-up companies, and even large corporations have had a tough time as consumers battled the recession and poor economy. As a result, many businesses have been operating in the red for far too long—and many have sadly closed their doors forever.
Yet businesses in Northern Virginia that are struggling with cash flow issues and debt do not have to surrender quite yet. There are ways to save your business, and bankruptcy may just be the option you’ve been looking for.
Liquidations vs. Reorganization
There are essentially two main ways businesses can file for bankruptcy: they can either liquidate their assets to pay their debt or they can attempt to reorganize their company and their debts. When a business is struggling, the way it chooses to handle its debt and protect its assets will often determine if that business survives. Individuals and businesses that choose Chapter 7 bankruptcy would essentially be liquidating their assets to pay their creditors, thus ending their company all together. After all, it is difficult to operate a business further if you do not have any of your assets or property left intact.
For those LLCs, corporations, or individual proprietors who wish to remain in business, but effectively manage their debt, Chapter 11 bankruptcy may be a viable choice. Individual proprietors and small businesses may also have a second option that is not available to LLCs or Corporations—Chapter 13 bankruptcy.
Chapter 11 and Restructuring
Businesses that are an LLC, a corporation, or owned by a partnership have only Chapter 11 bankruptcy as an option to restructure their debt and stay in business. It is also the only option for individual businesses that do not meet the qualifications for filing Chapter 13 bankruptcy. While Chapter 11 can be expensive and complex, it often allows businesses to keep their doors open, protect their assets, and weather through tough times without going under.
As part of the U.S. Bankruptcy Code, Chapter 11 allows businesses to restructure their finances through reorganization. Small businesses that meet the requirements may even be fast-tracked through the Chapter 11 process. However, an experienced bankruptcy attorney is needed to examine all of your business’ options and determine if you qualify for Chapter 11 bankruptcy and the fast track process to reduce legal and restructuring expenses.
Chapter 13 and Restructuring
For those small businesses and individual business owners who do not owe too much, Chapter 13 may be the best solution for eliminating your business debt and keeping your doors open. When filing for Chapter 13 bankruptcy, businesses must list all assets and debts. Your debt must fall below the debt limits (currently $383,175 unsecured debt and $1,149,525 liquidated secured debt) to qualify.
Determining which type of bankruptcy is best for your business involves the skills and knowledge of an experienced business bankruptcy lawyer. With the right legal help, you can keep your business’ doors open and maintain your income, while reducing your debt and weathering this difficult economic time.
Unfortunately, too many struggling businesses shy away from bankruptcy for fear of losing their assets and being forced to close their doors. Others avoid bankruptcy because they are concerned about the expenses and uncertain as to how filing will affect their future. Yet the U.S. Bankruptcy Codes were designed to give business partnerships, LLCs, corporations, and individual small business owners a way to get out from under crushing debt, while still staying afloat and keeping their dreams alive.
Contact Northern Virginia Bankruptcy Attorneys
At Tyler, Bartl & Ramsdell, P.L.C., we realize that this is a difficult time for many businesses in the community. Yet with the help of an experienced Northern Virginia Bankruptcy Attorney, you can save your business from going under.
For over 25 years Tyler, Bartl & Ramsdell, P.L.C. has helped thousands of small businesses, start-up companies, and large corporations find freedom from crushing financial debt. Call today for a free consultation at (703) 549-5000 or fill out our confidential contact form.