What Are The Options For a Business Bankruptcy?
When a business is struggling financially, it can be extremely difficult to determine what the best course of action is for the future. You might be wondering if it makes sense to close your business and to file for a liquidation bankruptcy, but you also may be interested in learning about how certain types of bankruptcy can allow you to reorganize business debts, to catch up with creditors, and to keep your business running while developing a more sustainable plan for the future. There are many different options for a business bankruptcy, and the type of bankruptcy that is best for your business and that your business is eligible for will depend on a number of factors, including the size of your business, the amount of debt your business has, the structure of your business, and whether your business the ability to begin earning a large enough profit in the future to avoid future insolvency. Our West Palm Beach bankruptcy attorneys can tell you more about the types of bankruptcy appropriate for businesses.
Chapter 11 Bankruptcy
Chapter 11 is one of the most common types of business bankruptcy (although it is important to know that an individual can also file for Chapter 11 bankruptcy, usually in circumstances where the individual does not qualify for Chapter 13 bankruptcy). This is a type of reorganization bankruptcy. As part of a Chapter 11 bankruptcy case, a business will reorganize or restructure debts through a payment plan and will keep their business open. Usually, Chapter 11 is only going to be an option for businesses that will have the ability to begin making enough profits to pay employees, bills, and other debts without running into serious financial difficulties again. It is important to be clear that a Chapter 11 bankruptcy does not require you to close your business, but rather allows your business to remain operational while you catch up on debts.
Subchapter V Bankruptcy
Subchapter V bankruptcy is a specific subtype of Chapter 11 bankruptcy that can be an option for small businesses. It has all of the benefits of a Chapter 11 bankruptcy—allowing your business to remain operational during the bankruptcy case, giving you an opportunity to reorganize debts and to come out of the bankruptcy to be a successful business—but it is less costly and more streamlined. This is a relatively new type of bankruptcy that is designed for businesses with limited amounts of debt.
Sole Proprietors and Chapter 13 Bankruptcy
Chapter 13 bankruptcy is only for individual filers (and not for businesses in general), but when a business is structured as a sole proprietorship, Chapter 13 actually might be a possibility. In general, Chapter 13 is very similar to Chapter 11 but significantly less complicated and less expensive.
Contact a West Palm Beach Bankruptcy Attorney
Is your business currently struggling, and are you considering the possibility of bankruptcy? You may already know that there are multiple types of bankruptcies for businesses, and the right type of bankruptcy for your business will depend upon the financial situation your business is in, as well as future plans concerning the business. One of our experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller is here to provide you with assistance. Do not hesitate to get in touch with our firm to learn more about business bankruptcy in South Florida.