When most people think of bankruptcy, they likely imagine the most dramatic forms of personal bankruptcy where debtors are left hanging and the individual’s credit is all but destroyed for years to come. These cases, however, do not represent the lion’s share of bankruptcy filing litigations from a purely dollars and cents point-of-view, nor the variety of ways in which bankruptcy can impact an individual or their business.
Understanding Commercial Bankruptcy Policies & Options
First and foremost, it is important to mention that if medical debt-related bankruptcy filings are excluded, then the quantity of bankruptcy filings largely involve a business. So, just what is commercial bankruptcy and how does the type of business dictate which options are available to the business owner or shareholders?
Not All Liquidation
While it is easy to imagine all bankruptcy filings as a total liquidation – in which a person’s home, not just their business, could be at risk for seizure – that is not actually the case. In reality, most people that file for bankruptcy never even come close to losing their home; many don’t even end up losing their business. Don’t allow the fear mongering marketing campaigns associated with bankruptcy to slant your view of this vital service: Bankruptcy offers Americans a way out of a bad situation through a number of specific options and protects businesses and individuals alike from being hounded by creditors that know they cannot be paid what their asking.
That said, there are plenty of instances in which liquidation is the best possible option for everyone involved, and it is for this reason that the policy exists in the first place. Pursuing liquidation without the assistance of a skilled business attorney can put your personal livelihood at risk and is therefore never advisable.
Most Bankruptcy Seeks Reorganization
By and large, a wide majority of bankruptcy filings simply give those in debt the breathing room they need to make good on their payments. Typically when a business seeks the services of a corporate attorney for help in filing commercial bankruptcy, they will get reorganized by the court and continue doing business while finding a new, typically more fair, way to pay back most or all of their creditors. In fact, most commercial bankruptcies do not end in a liquidation of the business, as that doesn’t typically offer the most benefit to those involved. Liquidation bankruptcy, also known as Chapter 7, isn’t an option for most bankruptcy situations, as that type of filing is reserved for businesses that have almost no conceivable way to earn revenue in the future and pay back the debts they have incurred.
Certain Businesses Enjoy Unique Options
There are some businesses that can find a special type of relief under bankruptcy law, especially those in the collection of resources. Farmers and fishermen, for instance, have access to a special type of filing (Chapter 12), that allows them to restructure their debt in anticipation of a better season, especially after a calamity. This protects the food and resource collection businesses in our society and gives them a security cushion to protect against one or more “bad years.” Your business may have special factors and considerations that can qualify you for a unique type of bankruptcy as well, but you’ll only be able to discover those benefits if you work with an experienced commercial lawyer that can successfully recommend and enact these filings on your behalf.
Commercial Bankruptcy Isn’t Scary
While nobody wakes up in the morning and wants to file for bankruptcy, it isn’t as scary as we’re lead to believe. With the help of a corporate attorney that knows and understands how bankruptcy filing can benefit business owners, shareholders, and their families in the right situation, you can find a peaceful, successful life after bankruptcy. Since bankruptcy filings aren’t something that people talk about, it can be easy to think that you’re alone in your desire or need to file for bankruptcy, but this just isn’t true. In reality, there are likely numerous people in your social network that have considered or successfully filed for bankruptcy in the past; for many small businesses, bankruptcy filings give them the breathing room they need to find success without closing their doors pre-emptively.
Contact Leech Tishman
Regardless of your motivations for seeking a commercial lawyer that specializes in bankruptcy filings, you should contact the nationwide team of business lawyers at Leech Tishman. Not only do we have offices in metropolitan areas across the country, but our business attorneys are backed by years of successful litigation and commercial bankruptcy experience. Our team will get to know you and your business before advising and assisting you on the best possible filing procedure for your situation.