What can I do if I am unable to pay business debts? 18 Answers as of December 05, 2011
I am unable to pay business debts, and looking for temporary options, if available. Your time and advice in reading this is much appreciated. I am unable to pay a few business debts and wondering what is available? My company has few business debts, and they will be paid as soon as I can, however right now there are too many financial problems. Is there any 'business bankruptcy' or financial status that I can claim? Even if only temporarily? As much as I feel terrible that these invoices can't be paid, it is not going to happen today, and I am looking into a business loan too. These are invoices from freelance employees, not vendors or other companies. Is there any temporary financial legal move I can make, so that I can try to avoid small claims court cases or collection fees? I don't want to declare personal bankruptcy but am wondering about other options.Free Case Evaluation by a Local Lawyer!
Enter Zipcode or for Immediate Assistance call (888) 428-7281
Have a general legal question? Click hereAsk a Local Attorney. 100% Anonymous. Free Answers.
Or for Immediate Assistance call (888) 428-7281
Free Case Evaluation by a Local Lawyer: Click here
Law Offices of David H. Relkin | David H. Relkin
Without making a global settlement with your creditors which is possible if we can make what is called a composition, you would file a Chapter 11 to reorganize the debts of the company.
Answer Applies to: New York
Replied: 12/5/2011
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Depending on the amount of debt, you might consider Ch13 which is a repayment plan that can give up up to 60 months to get caught up. You should see a lawyer about this. Bring him or her a 6 month Profit and Loss Statement, (since we are in December the P&L should be from 5/1/11 to 11/30 - do it by month). Also bring in your 2009 and 2010 tax returns.
Answer Applies to: California
Replied: 12/5/2011
Charles R. Nettles - Attorney at Law | Charles R. Nettles
There is no such thing as a "Temporary bankruptcy". You don't have to go out of business either. A Chapter 11 bankruptcy is may be what you need.
Answer Applies to: Texas
Replied: 12/5/2011
Edward Papa, Esq. | Edward Papa
You may qualify for a chapter 11 bankruptcy, business reorganization. You need to arrange a consultation with an attorney who can describe the different options available to you.
Answer Applies to: New York
Replied: 12/5/2011
Heupel Law | Kevin Heupel
There are no temporary legal pptions when solving a debt issue. You could look at Chapter 11, but it's a bankruptcy.
Answer Applies to: Colorado
Replied: 12/5/2011
Guardian Law Group PLLC | C. David Hester
The best way is to work with each creditor and tell them your situation and ask fro a temporary forebearance or minimal payments. If you have bad credit you can't get a business loan, and you could do a business bankruptcy but if its just you and you have any personal liability on the debts they will then go after you personally. The best is to let the creditor know of your situation and ask for some help from them.
Answer Applies to: Utah
Replied: 12/5/2011
Philip R. Boardman, Attorney at Law | Phil Boardman
The only way to stop the lawsuits without the creditors agreement is if you file bankruptcy. Your business can file bankruptycy. However, depending on how your contracts are structured, you may need to file personally. You really need to schedule a free consultation to sort through all of your options.
Answer Applies to: Virginia
Replied: 12/5/2011
The Law Office of Darren Aronow, PC | Darren Aronow
You can file a business chapter 7 bankruptcy to discharge all of your business debt. However, if you personally guaranteed that debt, then it will not get discharged and if you have assets, it may be seized by the trustee. Or you can file a chapter 11 and re structure your debt into a repayment plan.
Answer Applies to: New York
Replied: 12/5/2011
Carballo Law Offices | Tony E. Carballo
You mention having a business but don't mention whether you own a corporation or an LLC. It makes a big difference as to what you can do in bankruptcy. If you are not a corporation or an LLC then a Chapter 13 plan might be the answer to keep the business going but all that requires analysis of your debts, income and assets. You need a consultation with an attorney to review your entire situation and determine the best alternative.
Answer Applies to: California
Replied: 12/5/2011
Eliza Ghanooni, Attorney at Law | Eliza Ghanooni
It sounds like you need to speak with an experienced bankruptcy attorney to discuss your options. You do have options but you need to speak with someone so they can get more information on your income, assets and your whole financial situation so they can advise you on what direction you should take.
Answer Applies to: California
Replied: 12/5/2011
Law Offices of Michael J. Berger | Michael J. Berger
Chapter 11 is an option for you and your business. It lets individuals and businesses reorganize their debts. If is used by big companies like American Airlines and General Motors, by small companies, and by individuals.
Answer Applies to: California
Replied: 12/5/2011
Law Office of Harry L Styron | Harry L Styron
What might be possible depends, among other things, on your net worth and the extent of your debts, and you don't provide that information. When you refer to "freelance employees" that is kind of a contradiction in terms, since a person is either an independent contractor or an employee, but not both. If they are actual employees then they have priority over all of your other debts, and the right to go to the county labor commissioner to enforce their rights. If they are independent contractors, then they are left to their right to sue you for what is owed. As long as they don't do that there isn't a need to do anything. If you do get sued, then you will want to investigate whether you can qualify for a Chapter 13 bankruptcy or not.
Answer Applies to: California
Replied: 12/5/2011
The Stockman Law Office | Mary Stockman Esq.
The only business bankruptcy is either a liquidation in a chapter 7, or a reorganization in a chapter 11. The chapter 11 is labor intensive for any lawyer and most likely the lowest up front fee would be about $10,000. Additionally there is monthly reporting to the UST's office and copies of bank statements, etc. each month. There is the possibility of a negotiation with the persons through an attorney.
Answer Applies to: Florida
Replied: 12/5/2011
Mazyar Hedayat and Associates | Mazyar Malek Hedayat
Bankruptcy comes in two basic stripes: *liquidation* and *reorganization*. Consumer liquidation (Chapter 7) and reorganization (Chapter 13) are the two most reasonably priced and manageable forms of bankruptcy relief. But businesses can also liquidate using Chapter 7 and reorganize using Chapter 11. Note, however that business reorganization is considerably more complex and expensive than the personal variety: up to 10 times higher in price. But there may be a number of ways to manage your business debts without your having to file personal or business liquidation or reorganization. You need to sit down with a knowledgeable practitioner to explore your options. I have been practicing in this field for almost 17 years and have found there is almost always a way to accomplish your goals when you work with a creative, talented lawyer.
Answer Applies to: Illinois
Replied: 12/5/2011
James Branum Law | James Branum
If you business is incorporated you could filed a separate bankruptcy just for your business. Otherwise your bankruptcy would show up as a bankruptcy on your personal credit report. On the positive side of things, a bankruptcy where most of the debts to be discharged are non-consumer (i.e. from a business) does not have to comply with the means test, meaning that you can file a chapter 7 bankruptcy even with a higher income than you might otherwise be able to file. Every situation is different though. Contact an attorney in your area to discuss your situation in more detail. Good luck!
Answer Applies to: Oklahoma
Replied: 12/5/2011
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
The best option on a short term basis is to communicate with your creditors. You can make a temporary payment arrangement. Or you could send each creditor a small payment such as $20 with a note that this is only temporary. Filing bankruptcy for your business is a last resort. If the business is a sole proprietorship it would be a personal bankruptcy. You might also want to hire a credit counseling service, but beware of who you choose.
Answer Applies to: California
Replied: 12/5/2011
Harkess and Salter, LLC | Stephen Harkess
There is no magic solution. Your business could file for bankruptcy protection under Chapter 11, but this is a very major decision with large costs and consequences. Alternatively, you can contact the people you owe money to and attempt to negotiate payments over time so that you have more time for your temporary issues to work themselves out.
Answer Applies to: Colorado
Replied: 12/5/2011
Law Office of Lars Peterson, LLLC | Lars Peterson
I don't think there are any options for your in the bankruptcy realm - if you want to continue your business, you would have to file a chapter 11 bankruptcy, a so-called reorganization, which is usually work and cost-intensive. Unless the debts you are not paying or "delaying" are substantial, I would suggest to work on obtaining a business loan or work debt repayment plans with the creditors.
Answer Applies to: Hawaii
Replied: 12/5/2011
