Small Business Bankruptcy: What You Need To Know And How A Lawyer Can Help
The COVID-19 pandemic has affected many individuals and industries at different levels. For small businesses, the impact comes in the form of struggling to make sales, being unable to recuperate from operational expenses, and accumulating too much debt to the point of having the need to consult with a bankruptcy lawyer northern Virginia for a possible declaration of bankruptcy.
According to a study by the US Commerce of Chambers, an estimated 40 percent of the 30 million small businesses across the country is highly likely to close down in the next two quarters. It’s indeed a huge blow to the entire sector, and if you’re a small business owner who might face this inevitable pandemic consequence, you’d have to know what’s in it for you if you are to file bankruptcy.
Different Types of Bankruptcy
Filing bankruptcy is a legal route undertaken by businesses who want to have freedom from debt. It also provides their creditors a means of getting repayment.
If you will discuss your situation with your bankruptcy lawyer northern Virginia, you’ll know that there are different types of bankruptcy that you can file. They are commonly referred to by the US Bankruptcy Code chapter wherein their nature and specifications are discussed.
Chapter 7. Though this is more common for individuals, businesses with few assets can also file this bankruptcy. In this option, you’re basically selling off your assets to clear your debts. It also allows you to get rid of “unsecured debts” or those that are not backed by collateral.
Chapter 11. Many businesses take this route, whose goal is to help you reorganize and stay afloat until you become profitable again. While filing this bankruptcy, companies are to create plans to help increase their profitability and repay creditors.
Chapter 13. This option is both for individual and business entities with too much financial resources to qualify for either Chapter 7 or 11. This allows the filer to create a debt repayment plan, which states how they are to pay their debts over the course of typically 3 to 5 years.
The Need For A Bankruptcy Lawyer
Navigating the waters of bankruptcy can be quite tricky. The complexity of the matter comes on top of the distress you might already be feeling because of the status of your business. Hence, it is important that you have a reputable bankruptcy lawyer northern Virginia by your side to guide you throughout the process. Here are ways how an attorney who specializes in bankruptcy can help you out:
He/she will help you assess all your options. You will need a lawyer’s expertise to help you weigh which option is the most suitable for you and your business.
He/she will guide you about what to anticipate. Bankruptcy isn’t just about freeing yourself from debts. It has other important aspects like tax implications and the impact on your credit. An experienced lawyer will help you make decisions with these in mind.
He/she will ensure you have a successful filing. From gathering and preparing necessary documents to representing you in court, a bankruptcy lawyer is ready to help you file bankruptcy with your best interest in mind.
If you need a bankruptcy lawyer northern Virginia, our team at Bolger Law Firm can help you. We can help you clear the slate and have a better financial future. Contact us today!