Every business wants to thrive. It is a great way of earning high income, but it is also a fact that running a business involves far more complexities than any other kind of work. If the business doesn’t perform well, there is no other option but to consider bankruptcy, which can be extremely frustrating. However, bankruptcy is not necessarily the end of the road; it can also provide you with some light at the end of the tunnel. The process of bankruptcy is designed to aid you in winding down your business and mitigating the financial fallout simultaneously. Moreover, there are also situations where it is possible to file for bankruptcy without having to shut down.
Having a business bankruptcy attorney can make a huge difference for a business because they make sure that you have considered all the alternatives, filled out the appropriate forms and dealt with all the creditors. A business bankruptcy attorney can help you in saving additional expenses down the line. Therefore, it is a given that you would want to find the best business bankruptcy attorney to help you out.
Choosing the Best Business Bankruptcy Attorney
How do you find the best attorney for your bankruptcy issues? Here are some of the steps you need to follow:
Evaluate your business’s financial goals
Your business’s financial situation will determine the bankruptcy process and the type of lawyer that should be hired. There are three different types of bankruptcies that can be filed, which are Chapter 7, Chapter 11 and Chapter 13. The most common type of bankruptcy is Chapter 7, which is called a liquidation bankruptcy and it is filed when the business cannot afford to pay back their debts. The assets of the business are liquidated, distributed amongst the creditors and the business no longer exists. Chapter 7 can be filed by both businesses and consumers.
Chapter 11 and 13 are referred to as reorganization bankruptcies as the business continues to operate and submits a debt repayment plan to the court. Chapter 11 is solely for businesses whereas Chapter 13 is used by sole proprietors and businesses. You need to find a business bankruptcy attorney that specializes in the kind of bankruptcy you are filing.
Watch out for red flags
When you start your search for a business bankruptcy attorney, you will come across several options. Some of these lawyers have their own practice while some work with a small law firm. These kind of lawyers have a limited case volume and so they are able to offer you individual attention. For instance, they will help you come up with a debt repayment plan, discuss any alternatives you may have and even negotiate with creditors on your behalf. There are also attorneys who work in large firms handling hundreds of bankruptcy cases every month.
Such firms are referred to as bankruptcy mills and most of the bulk work is done by paralegals. You may not actually meet your business bankruptcy attorney for months. Such firms do provide you with efficiency, but no individual attention. Any firm that promises next-day bankruptcy or fast bankruptcy filing is probably a bankruptcy mill and you should steer clear of them if you want individual attention.
Use multiple sources to find a business bankruptcy attorney
There is no shortage of business bankruptcy lawyers out there, but the key is to find one who is a solid fit for your business. The best recommendations can be obtained from family members, friends and other business owners. While these are reliable, they may be better at dealing with consumer bankruptcy cases. Local and state bankruptcy bar associations can help you in finding the right lawyer near you.
Ask the right questions to do a comparison
After you have compiled a list of lawyers to contact, you can set up appointments with them. The initial consultation is usually free and helps you in determining if the lawyer will be suitable for you or not. The first question you need to ask a business bankruptcy attorney is about their experience. The process is complicated and you don’t want to suffer from mistakes. You also need to check the credentials of the attorney. A business bankruptcy lawyer needs to be certified by the local or state bar association. There are special requirements of bankruptcy bars for the lawyers and anyone who meets them can be termed as a capable business bankruptcy attorney.
You should also ask them questions about the bankruptcy process, get a proper timeline and learn about the consequences. Lastly, you should ask the business bankruptcy attorney about their preferred communication method. You want to be in contact with your lawyer and they should be available to answer any questions you may have about the process later on.
Talk to them about the fees
You should never make the choice of a business bankruptcy attorney based solely on the fee they charge. Some people often make this mistake and hire the lawyer that’s charging them a low fee, but this can cost you in the long run. Good attorneys will never provide their services for a low fee so you need to be careful. Furthermore, the fee of a business bankruptcy attorney will depend on the experience of the attorney and their geographical location. Likewise, the complexity of your case can also have an impact on how much you would have to pay your lawyer. Low fees might indicate an incomplete or shoddy job, but at the same time, you should ensure that the fee being charged is commensurate with the service.
Conclusion
It is a given that no business wants to think about bankruptcy, but it may be the only way out in some cases. A qualified business bankruptcy attorney by your side during this time can help in going through this complicated process with minimal damage. They are equipped to handle this challenging process quite well and will help you in dealing with it in the best possible way.
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