When to Declare Bankruptcy

Economy got you down? You’re not alone! Repercussions from today’s Great Recession appear everywhere – from tightened budgets to lagging sales and loads of debt. All of this can lower morale, but believe or not, business owners who find themselves in financial trouble may consider bankruptcy a helpful, restorative option.

The number of bankruptcies in the U.S. grew from 303 companies per day in 2009 to 342 in 2010. 

Hiring an experienced attorney is crucial. “In 2005, Congress made the bankruptcy laws more complicated, and the consequences more significant,” says Melissa Jacoby, a bankruptcy law professor at UNC – Chapel Hill. “A good lawyer can assess whether the business has some prospect of a successful resolution through bankruptcy.”

Bankruptcy options vary. Chapter 7 includes liquidation of property to creditors, while Chapter 11 allows the company to reorganize. The government offers further explanation of each type and its proceedings.

The New Bankruptcy: Will It Work for You? highlights not only the technical sides of bankruptcy (forms needed, steps to take), but the emotional side as well (financial freedom, self-respect).

Ask your attorney questions about which type of bankruptcy you should file, where to file it and all of the fees involved in the process, from court fees to attorney fees.

Bonus PINK Link: Still feel the recession bearing down on you? Learn how to cope with these strategies.

By Jennifer Gambrell

“Opportunities are usually disguised as hard work, so most
people don’t recognize them.” Ann Landers