Florida Business Bankruptcy Attorneys
Serving Miami, Fort Lauderdale, Coral Gables and all of South Florida
At the Law Offices of Aaronson Schantz Beiley P.A., we offer small businesses in Florida that are having serious financial difficulties services designed to alleviate the fiscal pressures they are experiencing. If your business is struggling with debt, then it’s important to investigate possible options, including the various types of bankruptcy at your disposal. Bankruptcy is not a good choice for every business, however if it makes sense in terms of your specific situation, it can be a way for you to protect yourself and your enterprise.
Types of Bankruptcy
In the State of Florida, there are three different types of business bankruptcy that you may utilize.
- Chapter 11- for most small businesses this is not a good option, but it may be utilized at times.
- Chapter 13- this is the most common one for small businesses
- Chapter 7- if your business is unable to pay its debts, this is often the best choice.
What type of bankruptcy is appropriate for you will depend on various factors, including how much debt you owe, the size of your business, and the assets associated with your company.
Chapter 11 bankruptcy, which is often known as reorganization bankruptcy, is not commonly used by small businesses such as sole proprietorships. Filing for Chapter 11, which allows a corporation or other large business to pay back its debt without any affect on the operation of the business or its assets, can be complicated and expensive.
However, filing for Chapter 11 is not always out of the question for a small business. The bankruptcy attorneys at the Law Offices of Aaronson Schantz Beiley P.A., will review all aspects of your enterprise to help determine if this is a good choice for you. Situations involving small businesses in which Chapter 11 may be a viable option include times when you suffera temporary setback during which debt has quickly accumulated or if your business has a large amount of debt but it’s still able to proceed in doing business. In the former scenario, you may be able to renegotiate your debt with each creditor, which would allow your enterprise to recover financially; in the latter situation, you may be able to reorganize and sell your business to a friendly group of investors, allowing your company and employees to continue to be productive.
Chapter 13, which is often the preferred path for small businesses, allows for an individual and their business to file for bankruptcy. With Chapter 13, you may keep your assets, which will allow your business to continue to function, while you pay back a portion of the debt that you owe to your creditors.
In order to file for Chapter 13 bankruptcy, you will need to submit proof to the court that you will be able to pay back your creditors a portion of what you owe them over a three- to five-year period. Utilized by sole proprietors or self-employed individuals, proof submitted to the court includes evidence regarding your monthly income over the past half-year, recent tax returns, information on all debts owed, and other documentation that will support your contention that you will be able to pay back a specific percentage of the debt owed.
Under Chapter 7 bankruptcy, both individual and business debts are included. This type of bankruptcy is considered by many to be the most advantageous to the business owner and the consumer, as they are able to continue operating their business as an ongoing enterprise, while maintaining possession and ownership of all assets.
Chapter 7 bankruptcy, which is designed for consumers and small businesses, is commonly utilized when someone is unable to generate enough income to payback their debts and if the person filing for such meets certain criteria. In order to file for Chapter 7 in Florida, you must make less than the state median adjusted according to the size of your family, or you must pass a means test that is used to determine whether or not you can actually repay your creditors.
Under Chapter 7, you are required to sell many of your business assets. The money received from the sale of assets is used to repay your creditors. Although there are certain tools of the trade that business owners are allowed to keep, still, often with Chapter 7 small business owners are unable to continue operationsand find that they must liquidate their company. This makes Chapter 7 less preferred than either Chapter 13 or 11.
What’s Best for You?
The bankruptcy lawyers at the Law Offices of Aaronson Schantz Beiley P.A., have found that small business owners are often overwhelmed by situations in which their company is in jeopardy due to escalating debt, and that they often have difficulty determining what they should do. If you find that you’re dealing with mounting debt that is making it difficult for you to do business, it’s important to seek help from a legal professional who is experienced and knowledgeable about all aspects of bankruptcy in Florida. Ininvestigating bankruptcy with your lawyer, you may also discover that there are other viable legal options that may work to your advantage.
We Can Help You Find a Solution
If your business is being affected by crushing debt, the attorneys at the Law Offices of Aaronson Schantz Beiley P.A., are ready to work with you to find the best solution for you and your company. We will take time to sit down with you and review your present situation, explaining which solutions will work best for you. Contact us today by call (786) 594-3000 or by filling out our short contact form. We’re ready to help you through this difficult time.