Bankruptcy Attorneys for Small Businesses in Sacramento
Sacramento, California is a dynamic city to do business in, but an array of market headwinds can temporarily or permanently derail a company’s fortunes. In many cases, a business incurring significant debt occurs due to factors outside the management’s or owner’s control. In other circumstances, unforeseeable market reversals or difficulties can transform previously profitable transactions or operations into liabilities. Unfortunately, at some point, the debt burden can become too significant for a business to sustain; your business, however, may have numerous options to meet this challenge and reduce or restructure its debt.
The attorneys of The Bankruptcy Group are dedicated to assisting Sacramento businesses and companies throughout California’s Central Valley with debt problems and concerns. Our bankruptcy attorneys are proud to offer individualized solutions to your company’s debt, including exploring bankruptcy options. We will always analyze your particular situation and present solutions that square with your goals. To schedule a confidential legal consultation with our legal team call 1-800-920-5351 today.
Debt Negotiation May Provide Relief and Prevent a Bankruptcy
Debt negotiation is often one solution for businesses that have incurred significant debts and are having difficulties servicing the obligations. Still, many creditors are unwilling to work with debtors, believing they should be paid the full amount or under the terms originally agreed. While this is certainly an understandable position, it is not often a realistic stance.
Creditors may become more flexible and willing to negotiate once it is clear that bankruptcy is on the table. A bankruptcy lawyer can remind them that it is possible they will receive little to nothing should their hard-line stance force the company into filing for bankruptcy. Many creditors will revise their position and permit for greater flexibility. Though, whether these modifications will be enough to avoid bankruptcy will depend on the exact modifications negotiated and the company’s financial position.
Understanding Small Business Bankruptcies for Sole Proprietorships and Partnerships
Sole proprietorship and partnerships are two common forms of bankruptcy. Unfortunately for business owners who utilize these types of entities, their personal assets are not protected from business liabilities. This is true for any sole proprietorship. In the case of a partnership, only limited partners’ assets are protected. Limited partners are typically investors who do not engage in the day-to-day business operations. General partners, the individuals who manage or own the company, do not receive asset protection.
Therefore, in most cases bankruptcies involving a small sole proprietorship and partnership are personal bankruptcies. This means that all forms of bankruptcy – Chapter 7, Chapter 11, and Chapter 13 — are available. In reality, Chapter 11 filing is rarely appropriate in light of cost concerns, whereas Chapter 7 and Chapter 13 do, respectively, present options to liquidate or reorganize the business. Our bankruptcy lawyers can help you explore your options to handle your business and personal debts.
LLPs, LLCs, PCs, and Corporations Are Separate Entities for Bankruptcy Purposes
Limited liability partnerships, professional corporations, limited liability companies, and corporate forms of organization ensure that your personal finances are separated from your business finances. This means that unless you personally guarantee loans made to the business, you are not liable for them. If you do not have personal liability for your business debts, the bankruptcy can involve only the business entity. However, if you do have personal liability, the strategy to reduce or eliminate these debts may also need to include a personal bankruptcy.
Small business bankruptcies for separate business entities mean that Chapter 13 is not available. Although, Chapter 7 and Chapter 11 bankruptcy are available; but in most cases a Chapter 11 organization is not advisable for a small business owner. Chapter 7 bankruptcy will liquidate your current company and sell off assets to creditors, allowing many people to start a substantially similar business following the close of the bankruptcy. The new business provide a fresh start without debt, and a chance to pursue different strategies and approaches to opportunities.
A Sacramento Small Business Bankruptcy Attorneys Can Provide Strategic Debt Solutions
The bankruptcy lawyers of The Bankruptcy Group will meticulously analyze your individualized situation prior to offering any debt reduction or bankruptcy advice. We understand each financial situation is different, and we will thoroughly explore all viable options prior to making a recommendation. If your Sacramento business is struggling under an unsustainable amount of debt, contact our bankruptcy attorneys by calling 1-800-920-5351 or contact us online today.