The coronavirus crisis has harmed countless businesses, leaving many owners considering whether to file for bankruptcy. According to CNBC, bankruptcy attorneys are bracing for a wave of filings.
Some business owners are waiting to see if they can survive through the restrictions related to COVID-19, the illness caused by the coronavirus. Many experts believe bankruptcy filings will start to rise in the late summer. That’s when loans from the paycheck protection program will run out and expanded unemployment benefits come to an end.
Why you should speak with a bankruptcy attorney now
If you own a business and your debt is becoming unmanageable, you shouldn’t wait too long to speak with an attorney. You may be tempted to take a “wait-and-see approach,” but in many cases, people with debt – businesses or individuals – can save a significant amount of money taking action sooner rather than later.
A bankruptcy lawyer can provide a free consultation and help you consider your options. For example, you may be wondering which type of bankruptcy is best for you as a business owner. There are different ways to file, and pros and cons to each method.
A new option under Chapter 11 bankruptcy
A form of bankruptcy that involves a reorganization of debt is known as “Chapter 11,” named after the U.S. bankruptcy code 11. According to CNBC, a new option under Chapter 11 can help business owners who need relief from creditors now, but want to continue to operate in the long term.
The option, which is called Subchapter 5, is designed to make the bankruptcy process more efficient and less expensive for small businesses. Subchapter 5 eliminates some paperwork and cuts out some costs.
There are still expenses associated with this new option, and the costs increase if your case is complex. You can contact Benjamin R. Matthews and Associates to schedule a free consultation to discuss this option.
Is Chapter 7 bankruptcy a good option for my business?
Chapter 7 bankruptcy is a common type of filing for individuals seeking to wipe out debt. Sometimes referred to as “straight bankruptcy,” Chapter 7 may be an option if your business has no viable future. Because Chapter 7 won’t erase business’ debt, some business owners choose to file an individual bankruptcy.
In response to the financial hardship caused by COVID-19, Benjamin R. Matthews and Associates offers “no money down” Chapter 7 bankruptcy filings to those who qualify (and most people will qualify). Under our “0” down program, you won’t have to pay legal fees up front.
What about Chapter 13 bankruptcy for my business?
If you own a small business, you generally would not be able to file Chapter 13 bankruptcy. This type of bankruptcy is for individuals only. If you’re a sole proprietor you may be able to file under your own name, however.
How a South Carolina bankruptcy attorney can help
Bankruptcy filings can quickly become complicated, whether you’re pursuing Chapter 7, 13 or 11. Our experienced and trusted attorneys can help you decide which option is best.
Matthews & Associates, LLC helps people across South Carolina get the help they need to take control of their circumstances during difficult times.
Contact experienced bankruptcy attorney Ben Matthews today for a free consultation.