Small Business Bankruptcy Attorneys in Folsom
Despite hard work, diligent efforts, and a well-developed business plan, not all commercial ventures pan out and result in significant commercial success. In some cases, well-intentioned decisions simply do not go as planned and the company may incur significant debts and liabilities. In other instances, reversals in market positions may make a favorable deal economically impracticable. Whatever the case, your business may have taken on significant debts and lack the financial means to service the debt, while simultaneously conducting business operations.
The Bankruptcy Group has a law office in Folsom and can assist your Folsom-area business in finding solutions to its debt situation. While we always proceed methodically and strategically, considering non-bankruptcy solutions first, bankruptcy does frequently present a viable option to reorganize or wind down company operations. To schedule a confidential bankruptcy consultation call 1-800-920-5351 or contact us online.
Debt Negotiation for Your Business
More often than not, creditors are willing to play “hardball,” and may refuse to work with your company on existing debts. It can take a drastic event to reset expectations and the process, and to bring the other party to the table. It is common for a bankruptcy attorney’s involvement with the specter of a potential bankruptcy to make creditors back away from their entrenched position. In bankruptcy, the creditor may receive pennies on the dollar. Thus, they may be more willing to forgive certain debt or permit loan modifications that free up cash flow so your business can get back to its operations.
Bankruptcy for a Small Individual Proprietorship
Many contractors and other small business owners rely on the basic structure of a sole proprietorship. It does not protect personal assets from business liabilities; therefore, any bankruptcy involving a sole proprietorship is also considered a personal bankruptcy. If you are considering a bankruptcy as the owner of a sole proprietorship, you can file for Chapter 7, Chapter 11, or Chapter 13 depending on your debts, assets, and goals for the bankruptcy.
Bankruptcy for Insolvent Partnerships
Bankruptcy for partnerships can have certain similarities to a bankruptcy for a sole proprietorship because the partnership does not necessary protect your personal assets from being used to satisfy business liabilities. General partners, the individual or individuals who own and run the partnership, do not receive asset protect and are therefore personally liable for partnership debts. By contrast, limited partners – individuals who invest in the company but are not engaged in operations – are not typically liable for business debts unless they have explicitly taken action assuming liability.
Bankruptcy for Limited Liability Partnerships (LLP), Professional Corporations (PC), and Limited Liability Companies (LLC)
While partnerships and limited liability partnerships may sound similar, there are important legal distinctions to be made. A partnership generally does not provide for protection and separation of personal and business assets and liabilities, but an LLP does. Unfortunately, LLPs are limited to professionals like lawyers, architects, and public accountants. Other professionals may be able to utilize a Professional Corporation (PC) to obtain similar benefits.
A PC and an LLP can protect professionals from incurring personal liability for business debts. A bankruptcy would likely only affect the professional entity and would not impact one’s personal finances. However, creditors may attempt to impose personal liability for the debts if you personally guaranteed a loan, engaged in professional malpractice, or committed an intentional wrongful act. A similar impact occurs when the business is organized as an LLC.
A Chapter 7 bankruptcy for a business is designed to liquidate the company and to compensate creditors to the extent of the entity’s assets. Bankruptcy exemptions are not available in a Chapter 7 filing for these businesses, yet it does provide for an orderly process that is supervised by a court.
If you would prefer to continue business operations, a Chapter 11 bankruptcy may be more appropriate. Provided that the business has sufficient assets to reorganize, Chapter 11 may be a viable option. Unfortunately, in many cases small businesses simply do not have the resources to successfully reorganize. However, you may be able to re-open a substantially similar business following a Chapter 7 liquidation. We can help you choose the strategy that is the most likely to free your business from debt obligations, and allow you to get back to doing the work you love.
Work with Folsom Small Business Bankruptcy Attorneys
The Bankruptcy Group is proud to serve businesses in Folsom and the surrounding area. We understand the difficulties and headwinds that companies face in today’s world, and we are dedicated to providing entrepreneurs with opportunities for a fresh start. To schedule a confidential bankruptcy consultation with our legal team, call 1-800-920-5351 or contact us online.