Business Bankruptcy

Experienced Guidance In Business Bankruptcy And Debt Relief

Entrepreneurs are the lifeblood of the American economy. Some of our best ideas and products are created by individuals willing to think big and take risks.

Unfortunately, while it is fairly easy to open a small business in the United States, it is much more difficult to keep it open and to make it profitable. It is even more difficult here in California due to burdensome regulations, stringent employment laws and other bureaucratic headaches. Mistakes and compliance concerns can be costly, which cuts into an already thin profit margin.

If you are a business owner struggling with overwhelming debt, help is available. At Joshi Law Group, we advise business owners looking to resolve their debts through business bankruptcy and other debt-relief options. We can help you, too.

Is Small-Business Bankruptcy Right For You?

Our attorneys are well-versed in bankruptcy law, but it’s not right for every business. You can trust that we will only recommend filing for bankruptcy if it is in your best interests. Even then, there are bankruptcy options:

• Chapter 7 bankruptcy is also referred to as liquidation bankruptcy. If your business is facing overwhelming debt that cannot be resolved through restructuring, Chapter 7 allows you to liquidate business assets to satisfy creditors. The process is easier with the help of a bankruptcy trustee and under the guidance of a court.

Each bankruptcy filing offers distinct protections. Typically, when we refer to business bankruptcies, we are referring to distinct business entities – corporations, LLCs, LLPs, general partnerships. A sole-proprietor can be eligible for a hybrid form of business & personal bankruptcy.

For businesses, a Chapter 7 may be the right choice if the business is seeking to close and formally dissolve as an entity. Under the Bankruptcy Code, businesses are not entitled to a discharge, but a bankruptcy can be beneficial in its imposition of an automatic stay and creating a single, streamlined venue for all dissolution issues to be handled. However, not all businesses seeking relief are at the point of needing to close/dissolve the business completely. For this reason, a business may prefer to consider a Chapter 11 filing. [Businesses are not eligible for Chapter 13 bankruptcy, but a sole-proprietor may be eligible.]

• Chapter 11 bankruptcy is focused on restructuring your business debt and formulating a plan to repay creditors. If approved by the court, your repayment plan will allow you to repay creditors over several years while keeping the business open and retaining most assets.

Business owners must take care to accurately disclose their assets and debt obligations to the court. The court relies on that financial picture to determine the amount of your monthly repayment plan to the bankruptcy trustee. Chapter 11 may be the right choice if you have a solid business that can survive under a more manageable debt schedule.

Whether you are an individual with significant assets, a small or a large business looking to reorganize your assets and debts while maintaining some control over your future operations, Chapter 11 may provide the solutions.

• Chapter 13 bankruptcy is designed for individuals, not businesses. However, with certain business structures (like sole proprietorship and partnerships), there is no distinction between business assets and the owner’s personal assets. In such cases, you can file Chapter 13 on your behalf of yourself, and it functions in much the same way as Chapter 11 for your business.

Debt Problems Happen. Don’t Hesitate To Seek Help.

As a business owner, you will inevitably run into debts and problems that you didn’t originally anticipate. Maybe you are being sued by a vendor, partner or shareholder. Maybe you encountered a problem with workers’ compensation insurance. Maybe you just entered the market during a time when the economy wasn’t very strong.

Whatever the cause may have been, you’re going to need help finding the solution. That’s what our experienced lawyers can help do for you.