We’re all going through a lot of financial stress right now, and many of you are likely worried about the health and sustainability of your small business. We know. We’re a small business.
If it seems as if there is no pathway for you to recover from your losses due to the coronavirus, bankruptcy may be a means to relieve that pressure. You’ve made the painful decision to shutter your small business, and think, “I’ll declare the business bankrupt, and then I’ll be fine.”
There are many different forms of bankruptcy, and they differ substantially between individuals and businesses. But how you’ve structured that business – and the sorts of promises you made to get it off the ground – may determine what type of bankruptcy is available to you and how protected your assets truly are.
Our practice, for example, specializes in personal bankruptcies. These are to resolve your immediate, personal debts. You’ve perhaps set up an LLC or small corporation to insulate yourself from the potential profits or losses from your business. That’s smart. But if you’ve signed any sort of personal guarantee to get that business started, you’ll find yourself personally on the hook. Maybe you’ve lent your own business money to get it through a rough patch, or the business helped you pay some personal debt. This likely creates a conflict, as the attorney who represents your business cannot also represent you personally. It also complicates the question of which sort of bankruptcy works for you.
Know this: We’ve been doing this for a long time, and can advise you on what your options are. And while we work in personal bankruptcy, we’ve also met some amazing attorneys on the business bankruptcy side of things, and can help you find the right one for you.
In the meantime, this piece we found on CNBC offers some helpful tips.