California’s Premier Business Bankruptcy Attorney is on Your Side
If you are looking for a business bankruptcy attorney in California, Coggins Law is looking forward to working with you side by side to protect your business interests. Since 2005, attorney Brian Coggins has provided expert legal advice and assists businesses in the greater Northern California area to avoid bankruptcy.
However, if you consider bankruptcy, California’s premier business bankruptcy attorney knows better how your business can find relief and achieve the best financial outcome possible through a business bankruptcy process. With his vast experience in business bankruptcy legal procedures, attorney Brian Coggins knows how best your business can conquer its debt situation and return to solvency.
Over the years, Coggins Law has helped businesses dealing with bankruptcy to determine the best course of action and ensure that the businesses live to thrive and rebuild.
What Is Business Bankruptcy?
Business bankruptcy is the legal process that allows a business to reorganize or liquidate its assets to pay back creditors. The decision to file for bankruptcy is made by executive leadership that has determined the company cannot continue operating under its current financial structure. The goal of business bankruptcy is to repay creditors as much money as possible while still allowing the company to stay in operation.
What Are Common Pitfalls That Lead to Business Bankruptcy?
There are many pressing reasons why a business may find itself in financial trouble and eventually file for bankruptcy. Some common causes include:
- Poor financial planning and management. Poor management of finances can result from inexperience, bad decision-making, or simply not keeping a close eye on the company’s finances. Once financial problems start, they can quickly spiral out of control. If an organization cannot independently reverse its financial decline, bankruptcy may eventually become the only option.
- Unexpected costs. Many businesses are forced into bankruptcy when they incur unexpected costs, such as medical bills, legal fees, or damage to their property. These costs can quickly overwhelm a company’s financial resources, leading to insolvency. Without having a solid safety net of cash or other assets, businesses can quickly find themselves filing for bankruptcy.
- Economic downturn. Recessions or other economic downturns can put immense financial pressure on businesses. When customers cut back on spending, businesses may be forced to lay off employees or close their doors entirely. This can lead to a domino effect, causing even more businesses to fail and increasing business bankruptcy filings.
- Poor customer service. In today’s competitive market, businesses must provide excellent customer service to survive. If a company falls behind its rivals in terms of customer satisfaction, it may start to lose business. This can lead to a decline in revenue, which can eventually force the company into bankruptcy.
- Poor product quality. Businesses need to offer products or services that are superior to those of their competitors. If a company’s products are of poor quality, customers will likely take their business elsewhere. The loss of revenue can eventually lead to the business needing to file for bankruptcy.
Business Bankruptcy: How and When Should Your Business File for Bankruptcy?
Is Bankruptcy the Right Choice for Your Business?
If your business is under pressure to make critical decisions concerning bankruptcy filing, you need to talk to a business bankruptcy advocate first. Depending on your situation, a knowledgeable business bankruptcy attorney shall provide a complete analysis of your business.
A business bankruptcy attorney will also represent your interests in court when bankruptcy proceedings require court appearances and meet with your creditors when the settlement occurs out of court.
Attorney Brian Coggins is a seasoned California bankruptcy attorney; you can talk about your business’s position at any time. Irrespective of your case’s uniqueness, he will answer any questions you might have and assist you in making the right decisions by guiding you through the options available.
So, You’ve Decided to File Bankruptcy, Which Chapter Should You File Under?
An attorney with a thorough understanding of bankruptcy chapters will help you to optimize your decision-making. You may file for bankruptcy under different chapters depending on what kind of legal entity your business is.
If you’re the sole proprietor of a business, you are solely responsible for all your business’s debts. Under a sole proprietorship, bankruptcy filing means filing bankruptcy for your business and as a person since you are not separate from the business. The most common form of bankruptcy, in this case, is usually Chapter 7 bankruptcy.
If your business is a partnership, all the business co-owners are jointly liable for the partnership’s debt obligations, except if it is a limited liability partnership. Since debt reorganization is available to partnerships, a partnership may choose to file for Chapter 11 bankruptcy.
Corporations and Limited Liability Corporations
Unlike sole proprietorships and partnerships, limited liability corporations and corporations are considered separate entities from their owners when filing for bankruptcy. With the personal assets of shareholders protected from the creditors, a business filing for bankruptcy here can choose either Chapter 7 or 11. Under the federal legal Bankruptcy Code, various kinds of bankruptcy are described. Depending on the type of legal entity they are, the following bankruptcy chapters are available to businesses:
Chapter 7 Bankruptcy
Being the simplest and most common form of bankruptcy, filing a Chapter 7 bankruptcy means that a business’s assets get to be liquidated, and its operations are brought to an end. If a debtor has very low income and extremely high debt, a trustee collects the debtor’s non-exempt assets, sells them, and distributes the proceeds to creditors. The business thus ceases to exist, and the owners move on.
Chapter 11 Bankruptcy
Businesses looking to restructure debt or renegotiate contracts can do so by filing for chapter 11. Under chapter 11 bankruptcy, the debtor continues operating their business as a bankruptcy court supervises creditors’ payment according to negotiated obligations contained in a debt reorganization plan. Being the most expensive and complex form of bankruptcy, businesses should consult a bankruptcy attorney for possible alternatives before deciding to file Chapter 11.
Chapter 13 Bankruptcy
Businesses that wish to avoid Chapter 7 bankruptcy should consider Chapter 13 bankruptcy. If your business is hitting very rough patches with debt, you could enter into this kind of debt reorganization plan with creditors to give your business a chance to get back on a stable footing.
What Homework Should You Do Before Filing for Business Bankruptcy?
If this is your first time in a business filing for bankruptcy, you may be feeling overwhelmed. The legal process and business law can be complex and confusing, so it is important to do your homework before taking any action. Here are a few recommended items you should consider before filing for business bankruptcy:
- Speak with an attorney. Don’t solely rely on Google searches and advice from well-meaning friends or family members to provide you with answers about business bankruptcy. Speak with a licensed attorney who can help you understand your options and make the best decision for your company. Hiring legal assistance is an immediate extension of your company and can help you avoid making any rash decisions that could jeopardize your business’s future.
- Consider all your options. Don’t rush into a decision to file for bankruptcy. Make sure you understand all the options available to you and their potential consequences. Although bankruptcy may be the best solution for your company, it is important to feel confident that you have exhausted all other options before moving forward with filing for bankruptcy.
- Understand the bankruptcy process. You do not want to enter into bankruptcy proceedings blindly. Take the time to learn about the process and what you can expect. This will help you better prepare for the challenges ahead and make the best decisions for your company.
- Create a plan. Once you have decided that bankruptcy is the best course of action for your company, it is important to create a detailed plan. This plan should include your goals for the bankruptcy process and how you intend to exit bankruptcy and rebuild your business. Without a robust plan, it will be difficult to make informed decisions and stay on track during the bankruptcy process.
- Consider the impact on your employees. Don’t forget to consider how bankruptcy will impact your employees. Although you may be facing difficult decisions, it’s important to remember that your employees are also affected by this process. Be clear about your plans and communicate regularly with your team so that everyone is on the same page.
By taking the time to do your homework and understand all of your options, you can be confident that you are making the best decision for your company — and can set your business up for success in the future.
How to Talk to Employees About Business Bankruptcy
If your company is considering bankruptcy, have a plan in place for how you will communicate this news to your employees. Although it may be difficult to have this conversation, it is crucial to be honest and transparent with your team. Here are a few tips for how to talk to employees about business bankruptcy:
- Be honest. You want to be honest with your employees about the situation your company is facing. Don’t try to sugarcoat the news or downplay the seriousness of the situation. Your employees will appreciate your honesty, and it can help build trust both in the company and its leadership.
- Be clear about the process. Make sure you are clear about your plans for the future and how the bankruptcy process will impact your employees. Be as transparent as possible so that your employees can understand what is happening and what to expect.
- Be supportive. Let your employees know you are there for them and offer your support. This is a difficult time for everyone involved, so it’s essential to be understanding and compassionate.
- Be positive. Although this is a difficult situation, remaining optimistic can help everyone in your company get through it. Your employees will look to you for guidance and support, so you are going to want to stay positive and focused on the future. You might also consider including your employees in conversations about the company’s direction after bankruptcy. Keeping everyone involved can help your company emerge from bankruptcy stronger than ever.
By following these professional tips, you can be certain you will have a productive and positive conversation with your employees as you venture through this challenging time.
Consult with an Expert Bankruptcy Attorney Experienced in Business Bankruptcies.
If your California business is dealing with bankruptcy and you are wondering how best you can protect your business’s future, you need to reach out to Coggins Law. With more than 15 years of offering bankruptcy advice and professional legal services to businesses going through bankruptcies, attorney Brian Coggins will examine your business’s bankruptcy case and help your business achieve financial freedom.
To get a free consultation, contact Coggins Law Office online or call +1 (916) 270-2895 today.