Bankruptcy for Small Business
For most small-business owners, their life is their work. They have spent countless hours creating, managing and building a business, often sacrificing social lives and even sleep to do so. But, despite our best efforts, sometimes life doesn’t go the way we want it to. Whether it’s because of a down market, a large chain store, even personal bills stemming from medical issues or divorce, it becomes untenable to continue forward. For an individual who has put his or her life into a business, letting go is sometimes the hardest decision they ever have to make. However, sometimes bankruptcy is the best option, and the only option that will allow them to start over again.
Let Bunch & Brock Help
At Bunch & Brock, Attorneys at Law, we know how much it can hurt to let go of something you’ve worked so hard to build and sustain. For more than 35 years, we’ve helped small businesses weigh their options and, oftentimes, helped them through bankruptcy; and we were there to assist them when they started over. If your small business is in financial trouble, for whatever reason, contact us today. We will evaluate your situation and help you find what is best for both you and your business. Operating out of offices in Lexington, Ky., our client base includes both small and large businesses, and we have acted as counsel for Kentucky companies like Samaritan Hospital, Foodtown Supermarkets, Black Diamond Coal Company and Appalachian Fuels. We have the knowledge, experience and resources to help you. If you have questions or need to set up an appointment, contact us online or call us today at 859.254.5522.
Causes of Bankruptcy
The reasons for bankruptcy are as varied as the businesses that file. The Houston Chronicle lists a few of the most common:
- Market Conditions – Market conditions, in almost all cases, are beyond the small-business owner’s control. When the overall economy is bad, people have less money to spend; with less money to spend, it isn’t just workers that suffer, but business owners, as well.
- Financing – Most small owners utilize investors and loans in order to purchase or start their business. If the business is slumping, not all lenders are willing to compromise.
- Poor Decision-Making – This generally occurs because of a lack of planning and strategy. It can also be caused simply by inexperience. Especially in the beginning, small businesses are less able to rebound from poor decisions.
Why Choose Bankruptcy in Kentucky?
There are a variety of reasons to choose bankruptcy, but the underlying cause is lack of funds to sustain the operation. Instead of being foreclosed upon, bankruptcy offers an option and an opportunity to start fresh. The timing of the decision depends on the business owner. Many owners, whether through emotional attachment or simply stubbornness, continue operating after the business has ceased to be viable. Another consideration is how the business is set up. At Brunch & Brock, we’ll evaluate your situation with you and explain your options.
Types of Bankruptcy
While there are several types of bankruptcies, with different qualifications and outcomes, the two most common for small businesses in Kentucky are Chapter 7 and Chapter 11.
Chapter 7: Chapter 7 bankruptcy closes the business. A trustee is selected to liquidate all the business’s assets and that money is then used to pay off as many creditors as possible. After this occurs, most debts are forgiven, depending on terms and stipulations.
Chapter 11: In Chapter 11, the owner retains possession of the business. The court gives the business a specified amount of time to reorganize and restructure, negotiating terms with creditors. Often the business will downsize or go through a strategic planning phase to become more efficient. After the time is finished, operations will begin once more.
Why Hire an Attorney for Bankruptcy in Kentucky?
Hiring an attorney for bankruptcy is not a legal requirement. However, the courts and financial experts all agree it is highly advisable. Bankruptcy is complicated, and experience counts when filing. Services offered by bankruptcy attorneys include evaluating your specific circumstances and helping you decide between the options available, evaluating which chapter of bankruptcy best suits your needs and preparing legal documents and filing in the proper court
The benefits of hiring a bankruptcy lawyer far outweigh those of attempting to file a bankruptcy petition by yourself. An attorney can objectively weigh decisions and has the experience to offer advice, which in turn will allow you to reap as many benefits from the process as possible.
With more than 35 years of experience serving the people of Kentucky, at Bunch & Brock, Attorneys at Law, we take great pride in assisting our neighbors in the community. If you are considering bankruptcy for your small business, Bunch & Brock can help. Working from offices in Lexington, we have the knowledge, experience and resources to guide you through your business challenges. If you have questions or would like to set up an appointment, contact us online or call us today at 859.254.5522.