This blog has recently discussed business bankruptcies and it is important for any sized business, including small businesses, to understand bankruptcy protections and relief that may be available to them. Struggling business owners should understand the relief that may be available to them through different bankruptcy options.
Small business that may wish to better understand or seek bankruptcy protection can include family-owned businesses; sole proprietorships; partnerships; limited liability companies; closely-held businesses and other small businesses. Similar to personal bankruptcy, business bankruptcies can provide relief to businesses in different situations and can also provide different types of relief based on the needs and goals of the business.
Filing for bankruptcy protection as a small business can actually be achieved through personal bankruptcy options including Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 13 bankruptcy provides reorganization bankruptcy relief to help the struggling business reorganize, shedding costs and debts and potentially attracting new investments, to get back on its feet. Chapter 7 bankruptcy protection provides liquidation bankruptcy relief if the business does not wish to remain in business. In addition, Chapter 11 business reorganization bankruptcy can provide a useful option for a corporation seeking bankruptcy protection.
It is important for a business owner with a struggling business to be well versed in these different options and which is best for the outcome they want to achieve from the process and for their business, whether it is to stay in business or move on. Bankruptcy protections are important sources of relief for businesses and struggling consumers alike to be familiar with.