Businesses may thrive or fail for a wide range of reasons in a nuanced and ever-changing economy. If you are struggling with a failing business, you should never feel shame in seeking debt relief. Instead, understand that you are taking assertive action to protect yourself, any other parties involved, and even your business itself in some cases. One common and highly effective debt relief option available to all kinds of businesses is bankruptcy. With the guidance and counsel of Behm Law Group Ltd., filing for Chapter 7 bankruptcy in New Ulm, MN, can be a positive, long-term solution for your finances.
While it’s true that the majority of Chapter 7 business bankruptcy cases end with the closing of the company, there are some businesses that can maintain their functioning after filing.
Businesses that stay open after liquidation include those that:
- Do not themselves own the assets needed for business operations (i.e. the assets are actually owned and have always been owed by the individuals who own and operate the business); and
- The total value of assets owned by the business is less than the total amount of debt owed by the business, particularly debts owed to creditors who have security interests in and to the business assets.
In the case that you can keep your business open after Chapter 7 bankruptcy, however, it may become increasingly difficult to maintain production/services and revenue. For those who would be unable to continue operating their business even while meeting the above condition, and for the remaining majority of business owners whose businesses close after liquidation, don’t despair. There is still hope you may be able to reopen your business in the future or start a new business successfully.
While it may be difficult, starting a new business after filing for Chapter 7 bankruptcy is entirely possible. Being fully prepared for the obstacles you might face is the best course of action if your end goal is a long-term business operation.
- You may have challenges getting loans and business credentials in general. It is hard but not impossible to gain business credit after a business you have already been affiliated with has filed for bankruptcy relief.
- The best way to improve your chances of gaining business credit is to create a detailed, strong business plan with both short- and long-term structure.
- Another way to improve your chances of a successful business is to partner with someone who has good credit and is ready to support you in the face of lenders.
- Finding investors with reputable backgrounds (friends and family included) to support your business in the beginning stages is often an effective way to navigate through and around the credit structure system.
- Many local banks and credit unions provide financing programs for those individuals and businesses who have worked through a bankruptcy case in their community. Finding organizations that are willing to support your endeavors with goodwill is also a viable option.
- Depending on the nature of your business and your community, you can also find a wide range of grants, financing, and crowd-sourced funding that are provided to many starting business owners.
If you are hesitating to file for Chapter 7 bankruptcy in New Ulm, MN, because of a concern for business closure or other difficulties beyond, contact Behm Law Group Ltd. at (507) 387-7200 to learn more. There is life after bankruptcy, both for the individual and the business!