bankruptcy options for business
Business Bankruptcy: How A Lawyer Can Ruin Your Troubled Business
There is a padlock on the delivery gate. Most of the manufactured pre-cast products formerly stored on pallets in the back lot are gone. The building has a huge “For Lease” sign attached to the front. Janelle, the former owner, drives by in a Rent-a-Lemon car. She had registered both her automobile and delivery truck in the name of her business; and, like everything else she had worked for years to build up, they are gone.
How did it all happen? She had run this business successfully for over twenty years. When events turned sour, everything happened at once. First, a powerful and wealthy client sued her for nearly a half-million dollars. Then, other clients, sensing the distress, started using one of her competitors. Her financial problems soon followed. Eventually she couldn’t make payroll, so she decided to file business bankruptcy.
Unfortunately Janelle didn’t do her homework. Instead of seeking out an experienced bankruptcy attorney, she used a small law firm that she knew about through a friend of a friend. Her selection of representation was bargain-basement. She never went to the website of the state bar association. Only later would she discover that her attorney had his license suspended not once, but twice in recent years.
Doing a Reality Check
In this case, Janelle suffered from a sense of invincibility. Clients had threatened lawsuits before and she had successfully handled them through mediation. This time, however, it was different. At the first sign of trouble, she should have done a serious reality check. When everything first started, she just had a troubled business. After she let it linger, it turned into a liquidation business bankruptcy with the loss of the personal property securing her business loans.
Business Bankruptcy: Know What You Are Getting Into
Small business owners across the country turn to business bankruptcy when they get into trouble. Often they discover, only too late, that going to an attorney to file business bankruptcy only makes their situation worse. Janelle made the fatal mistake of using a cheap attorney. When the lawyer looked at her, he did not see a businesswoman in need of sound advice, but an expense paid trip to the Orient.
To make matters worse, this attorney didn’t even specialize in bankruptcy proceedings. Therefore, he couldn’t prepare her for what could happen to her and her business. The incompetence of her bankruptcy lawyer left her with no legal alternative when the bankruptcy trustee decided it was time to liquidate her business.
An honest bankruptcy attorney would have explained the process and given Janelle other options. Why? Business bankruptcy is not usually the best choice for small businesses. Most do not survive and eventually must liquidate their assets. The process is expensive costing anywhere from $50,000 on up. Your company must have at least that much in the bank to emerge successfully.
As with any other large investment, Janelle should have shopped around for an attorney. If she decided that bankruptcy was right for her business, she should have interviewed several lawyers. A bankruptcy can take up to five years to complete. This means you should plan to have a long-term relationship with your bankruptcy attorney. Make sure you trust this person and have good communication with him or her.
Janelle’s is a classic case of doing too little, too late. Her story didn’t have to end this way. When your business gets into trouble, make sure you explore all your options. Find out what it takes to turnaround your business or simply shut the doors before deciding that business bankruptcy is right for you. While filing Chapter 11 can save some businesses, going into the process unprepared and with the wrong lawyer can destroy it.
About the Author
Kevin Muir makes it easy to turnaround your troubled business and avoid
bankruptcy. Learn the 3 vital factors to consider before you file for bankruptcy or turnaround your business. Click here to read the free report. http://www.KevinMuir.com/business-bankruptcy-lawyer.html
|
|
Foreclosure What your Options Are? Make Informed Decision Mortgage Mods $19.95 Foreclosure what your Options Are?Foreclosure Defense, Forensic Loan Audits, Mortgage Modifications, Reverse Mortgages, Forbearance/Recapture, Agreement, Short Sale, Deed in Lieu, Credit Repair, BankruptcyThis product is manufactured on demand using DVD-R recordable media. Amazon.com’s standard return policy will apply…. |
|
|
My Home is Worth What?! – Don’t Panic: 9 options for your Underwater Mortgage $9.95 ***Temporary Price Reduction, get your copy today, price will increase soon***5.0 out of 5 stars Great read!, January 23, 2012By Phil – “What a great tool. A must read for anyone with an underwater mortgage! I’ll be referring this book to everyone I know in this situation.”5.0 out of 5 stars Don’t stick your head in the sand, January 17, 2012By Thomas Wright (Minnesota) – “With a predicted 25 to 3… |
|
|
Personal Finance 101 – A Beginner’s Guide: What Every High School and University Student Needs to Know About Debt, Credit, and Money! $7.95 Everything that you need to know about basic personal finances, from how to open a checking account to getting credit cards to how to use credit wisely and to your advantage to how to avoid getting into trouble with debt and credit to how to get a loan or grant for university to basic investing ideas, and more is in this book! Filled with a wealth of knowledge to help you gain good personal financ… |
|
|
J.K. Lasser’s The New Bankruptcy Law and You $1.99 A comprehensive guide to the new bankruptcy law–and what it means for youSweeping changes to U.S. bankruptcy law–the first major changes to the law in twenty- seven years–are occurring right now. If you’re unfamiliar with the new bankruptcy law and how it could affect you, this book will quickly get you up to speed. While J.K. Lasser’s The New Bankruptcy Law and You thoroughly covers this lates… |
