With the COVID-19 pandemic temporarily closing many businesses and shifting consumer demand, many small businesses are struggling to increase their cash flow while covering debt payments. If your small business is one of the many that are struggling to stay afloat during this time, you might be wondering if filing for bankruptcy is the right choice. Our Fort Lauderdale bankruptcy lawyers explain if small businesses should file bankruptcy during this pandemic.
Are you a hospitality-based business? Are you a restaurant or hotel owner? Bankruptcy does not mean the end; it is a tool to help you deal with all the mounting issues, including your substantial long-term commercial lease payments and more. Get in touch with our team today to learn how reorganizing your debt can help your company: (954) 932-5377.
Does Filing for Bankruptcy Mean It’s the End for My Small Business?
According to a Business Administration professor at Harvard Business School, Stuart C. Gilson, bankruptcy doesn’t necessarily mean it’s the death of a company. If fact, filing for bankruptcy may be the very thing that saves a business. Bankruptcy, primarily Chapter 11, allows distressed companies to reorganize their debts. With bankruptcy, small businesses can cut expenses, sell non-core assets, and make overall capital improvements to help them remove their burdens.
Chapter 11 Bankruptcy & the Small Business Reorganization Act
Chapter 11 bankruptcy, which is the commercial bankruptcy code, allows companies to negotiate with creditors for better terms that will help them remain open. The goal for Chapter 11 bankruptcy is to help businesses get a fresh start by restructuring their debts.
The Small Business Reorganization Act of 2019 is a new subchapter V of Chapter 11 bankruptcy that helps small business debtors reorganize their debts. This process expedites the entire Chapter 11 process and reduces the costs for small businesses.
How Do I Know If Restructuring Would Help?
Chapter 11 bankruptcy can help you fix your balance sheets and allow you to restructure some debt, but it doesn’t generate revenue. When a small business files for bankruptcy, it’s important to create a solid business plan that will help you upkeep your business while paying off your restructured debts. An experienced bankruptcy attorney can analyze your unique situation and help you determine which debt relief option is best for your small business.
Contact the Fort Lauderdale bankruptcy lawyers at LSS Law today to schedule a virtual consultation!