Small Business Bankruptcy Lawyer New Haven, CT
In today’s world, many Connecticut residents have decided that it is more financially lucrative to stop being an employee and instead operate their own home- or office-based business or contracting service. However, as a small business bankruptcy lawyer New Haven, CT can explain, these types of operations often require a major investment of both time and money. If sales goals are not reached, the small business owner can find themselves being harassed by creditors, struggling to pay off their company’s debt, while still trying to maintain enough of a living to pay their personal bills, like mortgage, utilities, food, etc.
In these situations, working with a New Haven, CT small business bankruptcy lawyer is an option the business owner may want to consider. While there are immediate impacts on credit ratings, these can be overcome. In the long run, bankruptcy can provide a small business owner with the fresh start they need to make their business a success.
Bankruptcy for Small Businesses
According to national statistics, approximately 30 percent of all new businesses fail within their first two years. Only fifty percent of businesses end up celebrating their five-year anniversary. As a New Haven, CT small business bankruptcy lawyer can explain, there are a number of reasons for these numbers, including high start-up expenses, unreached sales goals, issues with marketing potential consumers.
On a positive note, the longer a small business can hang on, the more their chances of success increase. For companies that find themselves in financial difficulties, filing for bankruptcy may be a way to recover from the initial financial burdens many new businesses go through. Rather than closing up shop, filing bankruptcy can help eliminate some debts and enter into more practical repayment plans with others. It also prevents creditors from pursuing legal actions against the business.
The types of bankruptcy that a small business owner may want to consider are:
- Chapter 7: If the business is a sole proprietorship, the owner may be able to liquidate both personal and business debts in a bankruptcy filing.
- Chapter 11: If the business is a corporation, LLC, or partnership, chapter 11 bankruptcy can help reorganize the amounts owed, allowing the business to discharge some debts while structuring repayment plans for others.
- Chapter 13: If the business is a sole proprietorship or other business with less than $1,184,200 in secured debts or less than $394,725 in unsecured debts, the owner may be able to avoid surrendering property while repaying creditors based on their business’ future earnings.
Once a business files for bankruptcy, an automatic stay goes into effect that prevents creditors from taking any further action on its debts. In addition to filing the bankruptcy for you, a small business bankruptcy lawyer New Haven, CT clients recommend from The Law Offices of Ronald I. Chorches can renegotiate debts and vendor contracts, explain what small business loans may be available, and help your company get back on track.