Bankruptcy has provided effective debt relief solutions for many businesses in Florida, but is it right for you? Before making any important decisions about the future of your business, learn all you can about the bankruptcy process. Here are three common misconceptions about business bankruptcy and real information you can use to guide you on the path towards a debt-free future.
Bankruptcy will be the end of my business
If you file for Chapter 11 bankruptcy, your business can continue operating as long as you successfully complete the plan of reorganizing your business and paying back creditors. Chapter 11 gives you relief from creditors and a chance to rebuild and pay back your debts. The situation changes if you file under Chapter 7, in which case it likely will mark the end of your business.
Bankruptcy will take a long time
Another misconception about a business bankruptcy is that it will take several months, even years, to complete the legal process. This is typically not the case. In one notable instance, a Chapter 11 bankruptcy was wrapped up in less than 24 hours. Such an outcome requires extensive preplanning, but it illustrates how fast the process can run when all parties are engaged. The length of your bankruptcy will be determined by a number of factors, including the amount of debt, the complexity of your business assets and the number of creditors. Careful legal planning can streamline and shorten the process.
Bankruptcy will ruin my reputation
Very few business bankruptcies make the headlines. In fact, you might be surprised at the number of successful businesses that once filed for bankruptcy. If you remain in operation after your bankruptcy, it is entirely possible that your customers won’t even know about it. If they do, they may interpret the bankruptcy as a message that you are committed to staying in business and serving their needs.
Before making any important decisions, consult with an experienced business bankruptcy attorney who can help you separate fact from fiction.