Is a bankruptcy the best option for my struggling business? 4 Answers as of November 04, 2010I own 3 small retail stores, the business is struggling, it is an S corporation with 3 shareholders. I will not survive in the business for too long? What are my options? I have 2 years remaining in a commercial lease, and it will not be easy for the mall to rent out this locations.( I already talked to them). Should I file for bankrupt before I default on my rent on the lease or after I default on the lease?
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You have two bankruptcy choices with a corporation: Chapter 11 or Chapter 7. You use the former if you want to stay in business. Chapter 11 is very involved and quite expensive, so you need to have a viable plan of how you're going to reorganize (i.e. increase profits, etc.) before you file so you can survive the added costs of the Chapter 11. It can be a very powerful tool, but you need to assess the costs and benefits and all other options first. You should consult with a qualified bankruptcy attorney in your area for more information.
Answer Applies to: California