Corporate Bankruptcy Rate Expected to Rise
Are you currently questioning whether your business should consider bankruptcy? According to a recent report from Bloomberg, many companies are in the position, and a lot of them are filing for bankruptcy. Indeed, The report suggests that the relatively recent “corporate bankruptcy wave will get even uglier” as business bankruptcies continue to surge globally. In some places, the article intimates, business bankruptcy rates have reached a rate that is similar to that of the 2008 financial crisis. In the U.S. alone, corporate bankruptcies during the first half of this year have been at the highest rate since 2010. According to the Bloomberg article, the reason for the spike in business bankruptcies is “a combination of weakening demand, surging inflation, over-indebted balance sheets, and much higher borrowing costs.” What does all of this mean for business bankruptcies and business viability in South Florida? Our West Palm Beach bankruptcy attorneys can say more.
Businesses Struggling Financially May Have Options
While corporate bankruptcy rates appear to be rising, not all businesses will be impacted in the same way, of course. Accordingly, it may not be time to worry if your business is not struggling financially. At the same time, if your business is in fact struggling financially, it is important to know that bankruptcy could be an option.
There are different types of bankruptcy that businesses can consider. In many cases, a business can file for reorganization bankruptcy and continue to operate the business. Reorganization bankruptcies can also give the company a chance to catch up on debts and to get back on track financially in order to have financial stability in the future. Otherwise, businesses typically file for liquidation bankruptcies and close their doors.
Types of Business Bankruptcies to Consider
Reorganization bankruptcies filed by businesses are typically Chapter 11 bankruptcies. Through this type of bankruptcy, a business can restructure its debts. Smaller businesses and businesses with limited amounts of debt may be eligible for a simplified form of Chapter 11 bankruptcy under Subchapter V.
Liquidation bankruptcies are Chapter 7 bankruptcies. In this type of bankruptcy filing, the business assets will be liquidated, and the business will need to close permanently. While there is no discharge as there is in a consumer case, there is no need for one since there is no longer an existing entity for creditors to sue.
Contact Our West Palm Beach Bankruptcy Lawyers
Corporate bankruptcies have been on the rise, and recent data suggests that the increase in business bankruptcy filings is likely to continue into the foreseeable future. Whether you have general questions about business bankruptcy in South Florida or if you want to get started on a corporate bankruptcy case, you should contact an experienced West Palm Beach bankruptcy lawyer at Kelley, Kaplan & Eller to discuss your company’s circumstances. Depending on the financial circumstances your business is facing and the likelihood of your business thriving in the future, you may be able to file for Chapter 11 bankruptcy (or another type of reorganization bankruptcy). Otherwise, it may be time to consider a Chapter 7 bankruptcy and the liquidation of business assets. An attorney at our firm can help, and we can discuss your situation with you today.