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Irvine Bankruptcy Lawyer / Irvine Small Business Bankruptcy Lawyer

Irvine Small Business Bankruptcy Lawyer

Running a small business can be a rewarding experience, but it is not without its challenges. If you are facing financial hardship and struggling to keep your business afloat, you are not alone; according to the Bureau of Labor Statistics, 20% of new businesses fail in the first two years while 45% fail in the first five years and 65% fall in the first ten years. Only 25% of new businesses last for 15 years or longer.

Fortunately, there are legal options available to you when your small business hits hard times, and The Law Office of Charles A. May is here to guide you through the complexities of small business bankruptcy. Call our Irvine small business bankruptcy lawyer for help in Orange County, Los Angeles or throughout Southern California.

What Is Small Business Bankruptcy?

Small business bankruptcy is a legal process that allows struggling businesses to eliminate or restructure their debt while continuing operations or closing down. The primary aim is to give your business the financial breathing room it needs to either continue operating or shut down without leaving a trail of unpaid debts. In the United States, the most commonly used forms of bankruptcy for small businesses are Chapter 7, Chapter 11, and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy.” In this case, the business ceases operations, and all assets are sold to pay off creditors. After the sale of assets, most of your business debts will be discharged, meaning you are no longer responsible for them. Chapter 7 is generally best suited for businesses that have no viable future and need to shut down. Chapter 7 allows you to wind down in an orderly fashion and avoid liability for any lingering business debts.

Chapter 11 Bankruptcy

This is a reorganization bankruptcy where the business continues its operations but does so under a restructured debt plan. Chapter 11 allows businesses to renegotiate contracts and leases, pay off a portion of their debts, and improve their profitability. This is often a good choice for businesses that have a strong potential for recovery. The business owner continues as a “debtor in possession” and runs the business with the powers and duties of a trustee while working out a plan to pay down debt and become profitable.

Chapter 11 has historically been a complex and costly undertaking that only large corporations are capable of going through. However, since COVID-19 sent so many large and small businesses into bankruptcy, Congress adopted the Small Business Reorganization Act, offering an easier process for small businesses to take advantage of Chapter 11 bankruptcy protection.

Chapter 13 Bankruptcy

In the context of a business bankruptcy, Chapter 13 is designed for sole proprietors who are personally responsible for business debts. Chapter 13 allows you to keep your assets and pay off your debts over three or five years. This is an option if your small business is a sole proprietorship and you wish to continue operations while restructuring your debts. It is cheaper and less complicated than Chapter 11 but is only available to a certain type of business owner.

Why Choose The Law Office of Charles A. May for Your Irvine Small Business Bankruptcy?

Navigating the complex world of bankruptcy law can be overwhelming. That is why it is crucial to consult with a caring team that knows the ins and outs of California bankruptcy laws. At The Law Office of Charles A. May, we are committed to:

  • Personalized Consultation: Every business is unique. We take the time to understand your situation and tailor our advice accordingly.
  • Expert Guidance: Our team is knowledgeable in all forms of bankruptcy and can provide the most effective solutions for your specific circumstances.
  • Transparent Communication: We keep you informed at every stage of the process, ensuring that you’re never in the dark about the status of your case.

Get Help Today With Small Business Bankruptcy in Irvine and Southern California

If you are a small business owner in Irvine or the surrounding areas and you are considering bankruptcy, do not go it alone. The Law Office of Charles A. May is here to help you through this challenging time. Reach out to us today for a free consultation to explore your options and take the first step toward financial stability. We look forward to guiding you on the path to business success and financial freedom.

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