When a small business files for bankruptcy, they need the help of a bankruptcy lawyer. The legal process for small business bankruptcy is complex, with many requirements to be aware of before trying to file for business bankruptcy. A bankruptcy lawyer eliminates all of those problems and makes it possible to finish the process the right way.
Before you consider hiring an attorney, there are a few things that you should be aware of. Here is a deeper look at what you can expect from your attorney.
Everything Starts With a Consultation
When you engage a bankruptcy attorney, the first thing that they will do is schedule a consultation to learn more about your case. This lets the attorney evaluate the case to see if it is viable and that they are a good fit.
If the lawyer accepts your case, they will build a case and file it for you. From there, they guide you through the legal process to help you complete the requirements for bankruptcy.
Collecting Critical Information About Your Finances
The first big step that your small business bankruptcy attorney will take is to collect a lot of information about your finances. This includes your business and personal finances.
If your business is a separate entity, like an LLC or corporation, then the focus is on the business’s finances. Your lawyer needs things like profit and loss statements, tax filings, accounting documents, and many more. This information is needed to make sure that your business meets the requirements for bankruptcy. Each type of bankruptcy has different requirements that must be met, or the court can reject the case entirely.
In some cases, your finances may be investigated as well. This is especially true if you use personal assets to guarantee loans and other forms of financing for the business.
Building a Case Based on Your Situation
Your bankruptcy attorney will then build your case based on your situation. This includes choosing the right type of bankruptcy to file, as well as planning exemptions. In Minnesota and under federal law, there are exemptions for which assets can be included in a bankruptcy case. Your lawyer has to declare these at the beginning of the case when the finances are reviewed by the court. Your lawyer will likely declare as many exemptions as possible since these are assets of value that your business may be able to keep. Everything else can be used to pay debts or restructure your business.
Develop a Restructuring Plan
If you decide to file Chapter 11 bankruptcy, the goal is to restructure your business to pay off debts and make it profitable again. Your lawyer can work with the court to develop a plan for your business that makes it profitable again. If successful, then you may not lose the business in the process. Instead, you may be able to keep assets that are important to the plan and pay back debts over time rather than having to sell everything to pay creditors.
Schedule a Free Consultation To See What Your Options Are
Filing for bankruptcy can lead you back to a better place for you and your business. The only way to know for sure if it will help you is to talk to a lawyer. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form. We are here to help you through the bankruptcy process so that you come out better on the other side.
