For businesses in Salem struggling with debt, the best course of action to resolve those debts while still maintaining ongoing operations may be to seek bankruptcy protection. Businesses in such a situation that are considering bankruptcy may think that there options are limited filing under a Chapter 11 case. However, a company may file a Chapter 13 bankruptcy provided that certain conditions are met.
An important element of maintaining a thriving business in Salem is being able to adapt to changes in the market that are driven by consumer demand. However, there may be times when those changes occur so rapidly or prove to be so extensive that virtually no company could hope to deal with them successfully. The financial strain that may result from such a massive market shift could leave companies with little time to discover other potential revenue streams. In these cases, a Chapter 11 bankruptcy may provide business owners with the protection and time needed to reorganize themselves and secure the financial support needed to stay afloat.
Nearly all businesses in Salem may be subject to the fluctuations of the market, yet some may feel it much more than others. As consumer demand ebbs and flows, the hope is that those companies experiencing a crunch have the financial support needed to endure such times. However, if market predictions do not indicate a significant recovery on the horizon, these companies may be forced to seek bankruptcy protection to avoid being overwhelmed by their debts. In taking such action, businesses may be able to continue their existence through reorganization. However, such a move may only be possible after having shown its debtors (and for private companies, its shareholders) a recovery plan.
For the Salem businesses that we here at The Law Office of Paul Petrillo work with, one of the most important tasks associated with their impending bankruptcies is obtaining reliable and accurate valuations of their business assets. If you and your company are currently going through this process, then you may be waiting for the court of appoint someone to perform your valuation. Remember, though, that the court’s primary objective is processing your case, and not ensuring that you get the best valuation for those assets that you may be relying upon going forward in your bankruptcy proceedings.
More often than not, the companies that come to see us here at The Law Office of Paul Petrillo hope to continue operating after their cases have been discharged. If this adequately describes your situation, then reorganizing your debts and finances through a Chapter 11 bankruptcy may be your best option. To have a reasonable chance at succeeding post-bankruptcy, you may need to try and maintain as many of your current clients as possible. Your ability to do so will depend largely on your ability to retain your accounts receivable. The question then becomes is that even possible.
Not all of the business owners that we here at The Law Office of Paul Petrillo help work their way through bankruptcy are hoping to reorganize their companies through a Chapter 11. Some are sole proprietors or small business owners buried under a mountain of both personal and business debt. If you are a small business owner facing the potential of filing for Chapter 7 bankruptcy, then you may harbor some hope of being able to re-establish your company once your bankruptcy has been discharged. That, however, may depend on your ability to retain your business assets.
For both private citizens and companies in Salem, there may be many reasons why the need to file for bankruptcy protection could arise. Most would assume those to be related to a company’s operations or a person’s inability to manage his or her money effectively. However, that is not always the case. Sometimes, certain circumstances may manifest that are completely out of one’s control. Some may scoff at this idea, having firmly entrenched the thought in their minds that no matter the financial obstacle, they still will be able to overcome it. While this idea is certainly bold, history has often proven it wrong.
Managing debt is a challenge that nearly every Salem business owner has to face. In those cases where such debts begin to seem insurmountable, then the realistic assessment as to their abilities to pay them off may be necessary. If repayment is not possible, bankruptcy protection may be the only choice business owners have to either restructure their companies to continue operations, or simply walk away without the threat of continued action from creditors. According to The United States Courts, 31,671 companies in the U.S. sought such protection in 2014.
For those Salem companies that are looking to bankruptcy as their chance to discharge their debts and start again under a new corporate structure, then the challenge of dealing with creditors’ committees and other parties lies ahead as they work their way through a traditional Chapter 11 bankruptcy. Yet what if you run a small business that doesn’t have a large amount of debt? While the amount you owe may be a struggle for you to come up with, it may not represent a sufficient enough amount to warrant forming a committee of creditors. In this case, you may be able to be treated as a “small business debtor.”
A good number of the clients with whom we’ve worked here at The Law Office of Paul Petrillo have come to us with their business in a state of financial ruin. If your small business has been engulfed by debt and bankruptcy appears to be your only option, you may be wondering which type of bankruptcy to file. The answer to that depends largely on the corporate structure of your business, as well as your plans for the future.