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Bankruptcy options for small businesses

| Sep 19, 2018 | Firm News |

For many entrepreneurs, the thought of starting a business in Louisville is fun and exciting. Many of them do not realize how important it is to plan carefully and have a sound business plan in place. If you are the owner of a recent startup or intend to open a small business, you must plan for the possibility of bankruptcy. 

There are three types of bankruptcy for business owners to file: Chapter 7, 11 and 13. Your company’s tax structure determines which protections it can benefit from. Sole proprietors can utilize all three types of bankruptcies. Chapters 7 and 11 are most suitable for corporations and partnerships. The business world is tough and highly competitive. Many small businesses go belly up within the first few years. To circumvent many of the financial and operational challenges your venture might encounter, review the following information on small business bankruptcies

Find out the complete financial picture 

First, understand that filing for bankruptcy does not mean you are a failure. Though you may feel it means the end for your company, it does not. The bankruptcy options that are available to business owners provide protections to alleviate the business financial burdens. Before filing, you should review all company financial documents and agreements. Taking a good, hard look at the books can help you determine which expenses are necessary. If you do not know your business’ financial picture, you could lose out on the full protections of business bankruptcy. 

Do not wait too long 

The longer you allow financial problems to persist, the harder and more challenging it may become to deal with them. Get expert financial and business advice so you can learn ways how to utilize the protections and benefits to improve your company’s standing. The sooner you address the concerns that have you considering filing business bankruptcy, the fewer financial issues you will have to deal with after you finish restricting your company.