Small Business Bankruptcy: Here’s What Entrepreneurs Should Know

Sometimes, the success of a small business can be affected by things that are out of our control. The onset of the Covid-19 pandemic affected small businesses across the globe and forced owners to rethink their strategy to keep their dreams alive. Declaring bankruptcy is an option available to business owners that they can use to their advantage during tough and unprecedented times. Getting advice from bankruptcy lawyers Virginia can actually save you money in the long term and help you get back on your feet.

The benefits of filing for bankruptcy

A lot of people often associate the word bankruptcy with something negative. However, sometimes businesses struggle through no fault of the owner. A business that’s in decline can face many challenges such as demanding creditors and the welfare of the staff. Getting bankruptcy lawyers Virginia early on is a good decision to ensure that you are protected from creditor harassment from the start.

Once you have filed for bankruptcy, you and your lawyer can then go about looking at your business and how you can navigate your way out of your problems. Bankruptcy lawyers Virginia are very effective in helping their clients manage their debts effectively.

Businesses that file for bankruptcy also have the option to continue, thereby protecting the livelihood and welfare of the staff onboard. Eventually, the business can regroup and have a successful future.

The types of bankruptcy that are available for small entrepreneurs

If you’re handling your business by yourself, you’re known as a sole proprietor. Bankruptcy lawyers Virginia recommends Chapter 13 bankruptcy for individuals so that they can reduce the debt on hand and explore the options for payment plans to be made in a span of a few years. This way, assets don’t have to be liquidated and this is crucial because under the law, a sole proprietor is the same entity as the business. This option can influence the standing of personal credit.

Chapter 7 bankruptcy is another option for small business owners with debts that are so large, a repayment scheme is unrealistic. By doing this, owners dissolve the business so that debts are then paid off. In addition, personal credit is left unaffected.

One other possibility where businesses can continue operations is through Chapter 11 bankruptcy. This involves reorganization and repayment of debts while leaving room for the business to become profitable again.

Steps to take when you’re considering bankruptcy

If you’re an entrepreneur running a modest business with extreme difficulty, you will have to file a petition to begin the bankruptcy process for your business.

The next useful step you can take is to contact bankruptcy lawyers Virginia to help you explore all possible options and file the necessary paperwork. It’s completely understandable that business owners do not know all the legal system’s ins and outs, and that is exactly why having a trusted attorney by your side will make all the difference. They can make sure the paperwork is in order and give you the peace of mind that you will come through this stronger and sometimes even more successful.

At Bolger Law Firm, our bankruptcy lawyers Virginia are ready to guide you by the hand so you can go through bankruptcy with less headaches as possible and have a fresh start. Contact us today!