BANKRUPTCY FOR BUSINESS
General Motors, Chrysler and Block Buster avoided closure by filing for bankruptcy. Bankruptcy appears to have saved their businesses, kept jobs for their employees and allowed them to continue to provide goods and services for their customers.
Should you file? Many small and medium sized businesses are run by their founder or the founder’s family. Often it is hard for them to realize the only way to save their business is to bankrupt it. Bankruptcy may provide a means of reducing debt and
renegotiating contracts. It is a business strategy.
The bankruptcy code, under the right circumstances, allows a business to reorganize and create a plan to continue business under chapter 11. This law firm has seen one small business owner who continued a fruitless quest to keep the business as it once was. He wrote checks that were not covered in hopes of floating for the next windfall. Eventually he was prosecuted for writing bad checks. In another instance an owner kept using up all the firms resources to pay bills it could not afford. He ended up not being able to take any phone calls because of so many creditors calling. It is impossible to keep the focus on serving customers and growing a business when a person is overcome with bills. If a business has a positive cash flow by reducing certain unsecured debts and rewriting bad contracts then chapter 11 might be a way to reorganize that business.
If a business has no chance of a positive cash flow then chapter 7 might be the best escape for the owners of the business.
This country’s founding fathers made sure bankruptcy was available for Americans suffering under debt that could not be paid. Put the law on your side. Call to set up an appointment to discuss bankruptcy options with a bankruptcy attorney, 972-381-4296.