Greensboro, North Carolina Small Business Bankruptcies
Explore Small Business Bankruptcies in NC
Starting and running a successful small business in Greensboro, North Carolina certainly is challenging. Business owners experience highs, lows, and a fluctuating economy almost constantly. If you’ve also had trouble obtaining financing and are falling behind on payments on top of this, you might be considering filing bankruptcy.
Although a small business bankruptcy is a serious decision to make, it can be helpful for many business owners to:
- Restructure debts
- Pay back debts
- Get a fresh start
Even the biggest corporations file for bankruptcy from time to time. In 2020 alone J.C. Penny, Hertz, and Diamond Offshore Drilling filed bankruptcy applications because of economic uncertainties due to pandemic concerns.
Just because your small business files for bankruptcy doesn’t mean it has to close up shop. Our attorneys are well versed in the different types of bankruptcy your business may qualify for, and how they work to get you out from under piles of debt.
Reach out to Ivey McClellan for experience-backed bankruptcy advice. Filing bankruptcy with an experienced bankruptcy lawyer you can trust makes all the difference in the world. Plus, we may be able to help you negotiate and resolve the situation without declaring bankruptcy.
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Types Of Small Business Bankruptcies in Greensboro, NC
Each type of small business bankruptcy offers different benefits. Talk with a local, experienced Greensboro, North Carolina business bankruptcy attorney to figure out which types you’re eligible for, and which one best suits your particular situation. Typically, most small businesses choose to file bankruptcy under Chapter 7 or Chapter 11.
Chapter 7 Bankruptcy For Small Businesses
If you’re in over your head and drowning in bills and unpaid balances, you may decide it would be best to liquidate and close up shop. Chapter 7 Bankruptcy may be a viable option for you. However, once you file a Chapter 7 bankruptcy, your business will not be allowed to continue to operate.
Chapter 11 Bankruptcies For Small Business
If your small business is structured as a company or a sole proprietorship, filing Chapter 11 bankruptcy may be your best bet.
Chapter 11 allows small businesses to reorganize debts and keep the doors open. This option may be preferable if the small business has a realistic chance of repaying debts to its creditors. Again, it’s recommended you work closely with an experienced bankruptcy attorney before filing to ensure it’s the right choice for you.
Chapter 12 Small Business Bankruptcies
Also known as agriculture bankruptcy, Chapter 12 is reserved for farmers and fishermen. If you own a fishing or farming operation and meet certain eligibility requirements, you may be able to file a Chapter 12 bankruptcy to reorganize your debts.
Sole proprietorships and corporations that don’t operate in the fishing or farming industries typically aren’t eligible for this type of bankruptcy.
Chapter 13 Bankruptcy For Small Businesses
When a small business is looking to reorganize debts, and not dissolve, Chapter 13 bankruptcy might be the ticket, if you are operating as a sole proprietorship or a DBA. Over the course of three to five years, Chapter 13 debtors can repay debts based on how much they earn, how much is owed to creditors, and the value of their assets.
Chapter 13 can help you keep important assets like your home or vehicles. Many sole proprietors are considering Chapter 13 bankruptcy because of the detrimental economical effects of the coronavirus pandemic.
Automatic Stay & Bankruptcies In Greensboro
If you file Chapter 7, 11, 12, or 13 bankruptcy for your small business, you will benefit from an automatic stay. The Automatic stay is part of the United States Bankruptcy Code that prohibits credits, lenders, and other agencies from harassing debtors or taking any collection actions against the debtor. This means that if your business is being called constantly by debt collectors, those calls should stop once you file for bankruptcy.
Not only does automatic stay help protect the debtor while they reorganize or develop a repayment plan, it’s also designed to benefit the lenders. This option gives each creditor a "fair chance" of obtaining appropriate payments for outstanding balances and debts.
Also, because creditor phone calls, text messages, letters, and emails can be overwhelming, many small businesses need the benefit of the automatic stay simply to get a break and catch up.
Trustees For Greensboro, NC Small Business Bankruptcies
A bankruptcy trustee is someone appointed by the United States Bankruptcy Courts. This person is responsible for managing the bankruptcy process for Chapter 7, Chapter 12, and Chapter 13 bankruptcies.
Small Business Bankruptcy Attorneys
Ivey McClellan is an established bankruptcy law firm located in Greensboro, North Carolina, and the surrounding communities. We offer extensive experience and trusted advice to each of our small business clients. Filing for any type of small business bankruptcy is a complex and challenging process. This is why our clients count on us to negotiate with creditors, file the necessary bankruptcy paperwork, and more.
For a consultation to see if bankruptcy is right for your small business, call us or use our online contact form. We’re here to answer your questions and get you started on a path towards financial freedom. Get a jumpstart on rebuilding your finances after bankruptcy proceedings with Ivey McClellan at your side.