Bankruptcy-Avoidance Strategies and Pre-Bankruptcy Counseling
When counseling the financially stressed business and business-owners, Birch Horton Bittner & Cherot attorneys strive to find solutions that do not involve filing for bankruptcy. There are some situations in which bankruptcy is unavoidable. See Business bankruptcy cases (including business owner bankruptcy). However, in many situations there are better solutions. See Loan modifications (workouts and forbearances).
Business owners need to understand that their first instinct of doing whatever it takes to keep a failing business going is not always their best option (sometimes it is). Many business bankruptcies are filed for the purpose of selling the troubled business, which can maximize the return to the creditors and salvage a bad situation for the owner. See Acquiring, financing, and selling distressed businesses and assets.
There are a variety of situations. Sometimes the failing debtor is a business entity (corporation, LLC, etc.) and the business owner is not personally liable for the business debts. In other situations, the business owner is personally liable for business entity debts. The specifics of the situation impact the analysis of the best option for addressing financial problems.