Monroe Business Bankruptcy

Businesses across America, large and small, sometimes run into difficult financial times. When such economic difficulties strike, business owners are often tempted to tough it out, and weather the financial storm until brighter days appear.

However, this is not always practical, nor is it always the best strategic choice for your business. Sometimes bankruptcy is the answer.

If you are a Monroe, Louisiana business owner and you think bankruptcy is a viable option for your company, contact an experienced bankruptcy attorney to discuss a Monroe business work out today.

Business bankruptcy in Monroe

How can you determine if bankruptcy is right for your business? This depends on the structure of your company.

Corporations, limited liability companies, and partnerships are legal entities that are considered separate from partners and shareholders. Such business can file for Chapter 7 or Chapter 11 bankruptcy.
Proprietorships and sole proprietorships are not legal entities, but extensions of the personal assets of their owner. In this case, the proprietor must file for personal bankruptcy. Such individuals file Chapter 7, Chapter 11 or Chapter 13 bankruptcies.

Reorganize or liquidate?

This depends on how your business got into its current predicament.

Reorganization cannot create a market for your product, increase your revenue, or make your business better. However, it can free up cash to let a profitable operation continue, or to prevent the loss of assets to creditors.

In other scenarios, liquidation under Chapter 13 or Chapter 11 can provide breathing room for the owners, allowing them to prepare to sell off the business as a going concern or in some other capacity. The earnings from this sale can be used to repay back taxes or salaries, or could allow employees to continue working under new ownership.

However, reorganization under Chapter 11 requires considerable time and resources on the part of ownership in order to comply with bankruptcy regulation, communicate with lawyers, and negotiate with creditors. This can cost money as well as time. It can drain your time and resources beyond the breaking point and is one reason that many reorganizations fail.

Businesses such as the following are often better served by liquidation with owners starting anew under a fresh legal entity once the bankruptcy is complete:

Businesses that need little capital
Businesses that own few assets
Businesses that boil down to extensions of the skills or personality of the owner