Bankruptcy and your Business: What you need to know!
Most people associate bankruptcy with bad things, yet the truth is that it can help you reorganize your finances and handle debt. When companies decide to take this step, they file a Chapter 11 bankruptcy. As long as they work with experienced Utah bankruptcy lawyers, this might be the best decision to make.
What is Chapter 11 Bankruptcy?
This type of bankruptcy involves reorganizing a company’s affairs, assets, and debts. It allows a business to keep operating and restructure its responsibilities.
How Does Chapter 11 Bankruptcy Help Reorganize Finances?
To ensure that both creditors and owners get the maximum return, there will be some financial restructuring. This can be downsizing the company’s operations to minimize expenses, renegotiate debts, and in some cases, liquidate some assets to repay creditors. The process is complicated, and since the courts are involved, it is good to have a bankruptcy attorney Taylorsville representing you.
How Does the Type of Business Set up Determine Who is Responsible for The Debts?
In a sole proprietorship type of ownership, you and your business are considered the same entity. That means you are personally responsible for the debt. If the company lacks enough money to cover debts, creditors can come for your personal assets.
Here, each partner is responsible for the companies’ debts. If the company lacks enough money to pay debts, creditors can come for your personal assets as one of the owners.
Corporations and Limited Liability Companies
In these types of business arrangements, your personal assets are protected. However, if, by any chance, you may have given up your limited liability protection, then creditors can come for personal assets. Having an Alta legal team by your side to explain these things will help you with the whole process.
How an Attorney Can Help
Hiring a bankruptcy attorney Taylorsville UT will help you and your business analyze the different aspects of your business and decide what will help you get out of debt. For instance, if downsizing operations to minimize expenses is the ideal solution, then that is what they will help you with. They will also ensure you are not harassed by creditors and help ease the business back to profitability.