Many business owners view bankruptcy as the end of the line for their company, but this assumption is the furthest from the truth in some situations. Bankruptcy can be a solution for organizations, enabling them to thrive once they emerge from the process. However, there are many factors to consider. Whether bankruptcy is the right fit depends on your industry, business structure, assets, income, and objectives. Plus, it’s important that you fully understand the proceedings under various chapters of the US Bankruptcy Code.
Ultimately, you should rely on a North Carolina business bankruptcy lawyer for advice and counsel. In addition, you may find it useful to check out an overview continuing your business after bankruptcy.
Key Questions About Continuing Operations After Business Bankruptcy: There are many factors you’ll need to review before making a decision regarding bankruptcy for your business. Initially, there are three questions you must ask:
Does your business make money? The whole point of your company was to make a profit, so closing your doors might be the right decision if you’re consistently failing in this goal. However, if your financial strife is due to temporary factors, bankruptcy could be an option to help you get through a poor economy or tough times.
Are you personally obligated on any business debts? If you personally signed a promissory note, guaranty, or took out other loans for your company, bankruptcy might be a smart solution. Through the process, you could keep the business running and earning money as you’re dealing with creditors in the bankruptcy process. By closing down, creditors may have no choice but to go after your personal assets.
Do your business assets outweigh your debts and liabilities? You have a strong case to continue your company after bankruptcy if its assets are worth more than liabilities. If you’re upside down on assets and debt, however, dissolution may be the better move.
Overview of Bankruptcy Options: In most cases, a Chapter 7 liquidation is impractical or impossible for a business bankruptcy. You can’t protect your assets from creditors, since the trustee sell them to satisfy creditor claims. Without any assets, you may not have anything left to run your company on. Chapter 11 will probably be the most appropriate bankruptcy strategy for your business, since it involves reorganization instead of liquidation. Through this process, you negotiate your debts and get your creditors to agree to a repayment plan. Most importantly, you keep your assets – so long as you comply with the repayment plan conditions.
Contact a North Carolina Business Bankruptcy Attorney About Your Options
Hopefully, this information highlights some of the key issues you should consider if you want to continue your business after going through the bankruptcy process. It may not be an option for every company, which is why you should rely on a knowledgeable lawyer to learn more about the pros and cons. For additional information and custom-tailored advice, please contact Howard, Stallings, From, Atkins, Angell & Davis, P.A. You can call our offices in Raleigh, New Bern, or Morehead City, NC to set up a consultation.