What should you do if your small business starts to accumulate debt? (West Covina attorney David Lozano offers professional advice to small business owners!)
I talked a little bit about small business bankruptcy in a previous blog–Bankruptcy for the small business owner. Today I want to stress the importance of seeking professional guidance as soon as financial difficulties arise. Small businesses often struggle to compete with corporate businesses or other small businesses in the same region. When your business starts to show signs of falling behind, contacting a professional adviser may stave off future debt and bankruptcy.
A business runs on the incoming revenue from its clients and customers. If several clients happen to be slow on making payments within the same time frame, it can be devastating, especially for a small business. Also with the high prices of many commodities and supplies that businesses use, the struggle to make a profit can be daunting from quarter to quarter!
At the first sign of trouble, it is a good idea to seek professional advice about how to proceed. And if your business is going through a period of slow sales and is struggling with debt, Chapter 11 business bankruptcy may be the solution! Restructuring the business’s financial affairs and payment schedule can give you just the break you need to catch your breath and get your business back on track! Contact me or visit our West Covina location for a free consultation.
Business owners often devote a full 40-hour work week to managing their business. This simply goes with the territory of owning a company, but I’ve found small business owners go a step further. They spend more than the allotted 40 hours a week making sure every project and final piece of paperwork is in order, down to the last minute detail!
Many small business owners will cancel or reschedule personal plans when a situation at work arises that needs their immediate attention. In fact, a small business owner’s personal life and business affairs are usually so entwined it is hard to tell where one ends and the other begins.
It is in cases like these–when the business is not a corporation, partnership, or a limited liability company (LLC)— that it falls on the owner to file bankruptcy if the business is in danger of going under. It is also important to understand that filing Chapter 7 or Chapter 13 for a business is different than filing personal bankruptcy.
In Chapter 7 business bankruptcy, ownership of the business is transferred to the bankruptcy lawyer, who is responsible for ceasing operations and liquidating the business’ assets with the proceeds going to the creditors. Chapter 13 business bankruptcy gives the owner more time to sell assets. The benefit of this is that the owner may be able to sell the assets for a better deal than what the assets would be sold for with Chapter 7 business bankruptcy.
When small business owners must file business bankruptcy it can seem like asking the owner to give up an arm or a leg. I know how attached small business owners can be to their company, and I do everything in my power to ease the process. Contact me for a free consultation to determine what needs to be done for your small business!