According to the US Bureau of Labor Statistics, as many as 20% of small businesses in the country fail within their first couple of years of inception. What’s even grimmer is that only 55% of small businesses survive after five years and only about 33% last for 10 years. Despite these figures, which are commonly known, most entrepreneurs believe their venture will not fail. It is this confidence that gets businesses through the toughest of times. It is worrisome, however, that small business owners rarely prepare enough for an unfortunate turn of events.
Preparing for the Worst
This idiom – hope for the best but prepare for the worst - imparts great wisdom. While small business owners need to be optimistic and geared for success, they also need to be ready for adversity. However, the truth is that most business owners lack any knowledge of filing bankruptcy for a small business. This is the reason they need a bankruptcy attorney.
Statista: Business Bankruptcies Filed in the US from 2000 to 2020
How Can a Bankruptcy Attorney Help Your Small Business?
Which Chapter of Bankruptcy to File?
Most people think that Chapter 11 is the only business bankruptcy. However, a business can file for Chapter 7 or even Chapter 13 bankruptcy in the case of sole proprietorship firms. Each of the Chapters have unique benefits and procedures. You need a bankruptcy attorney to know which filing is most suited for your business. The lawyer can help analyze your specific circumstances and determine which chapter is most appropriate for your business.
How to File for Business Bankruptcy
An experienced bankruptcy lawyer will help you through the complete legal process of filing for bankruptcy. At times, a business may file for Chapter 11 bankruptcy, but it may subsequently be converted to Chapter 7 liquidation. The attorney will ensure that accurate details are filed, documents are complete, and no deadline is missed, preventing any delays. The lawyer can also prevent you from the complications resulting from unintentionally committing bankruptcy fraud.
Stop Harassment from Creditors
The bankruptcy procedure may involve several unpleasant experiences. However, the most stressful of this is answering creditor calls. Many business-owners dread being followed up by creditors trying to collect their dues. Initiating bankruptcy proceedings will prevent them from harassing you any further. If creditors do call, you can simply ask them to contact your lawyer.
Help Save Money
At times, small businesses do not contact a bankruptcy attorney due to their stressful financial situation. Will hiring a lawyer make it worse? This is probably the biggest fallacy, as an attorney can actually help you save money. This is because they ensure the process is completed as fast as possible and that the outcome is to your best advantage. An experienced bankruptcy attorney can help you through the legal process with and minimize the effect on your personal finances.
If your business is in financial distress, it is imperative to consult an experienced bankruptcy attorney sooner than later. MaryBeth Schroeder is familiar with all the complexities of the legal procedure, can ensure that the process is smooth and fast, and that you emerge from bankruptcy in the best possible situation.