What to Do If Your Business is Being Forced into Bankruptcy
Although it is a rare scenario, some businesses will be forced into filing for bankruptcy. Since bankruptcy can seriously affect your business, it’s important to understand how this can happen and what your rights are if creditors take action against you and attempt to force you into filing bankruptcy. Here’s what you need to know.
When Can a Business Be Made to File Bankruptcy?
If your businesses has more than 12 creditors, three of them can start a case against you in an attempt to compel you to file involuntary bankruptcy. If your business has less than 12 creditors, only one creditor is needed to file action against you.
The creditors must show that the business owes $14,425 in unsecured debt. Debts that are secured by collateral of any type may not be counted in this figure.
What Types of Involuntary Bankruptcy Can a Business Be Forced Into?
Are There Exceptions to What Businesses Can Be Made to File Bankruptcy?
Not every type of business can be forced to file for an involuntary bankruptcy. For example, insurance companies, nonprofit groups and charities, farmers, banks, and credit unions or savings and loans institutions cannot be forced to file Chapter 7 or Chapter 11 bankruptcy.
What to Do If You Have Been Notified That You Will Need to File Involuntary Bankruptcy
When you are notified by your creditors of their intention to force you to file for bankruptcy, or when you are notified by the bankruptcy court that there is an action against you, it’s critical to have the support of an experienced business bankruptcy lawyer in your corner.
At the Law Firm of Joel M. Aresty, we can inform you of your rights every step of the way, and we can help protect your business throughout your case. We will take action to attempt to stop the bankruptcy, or in cases where bankruptcy is actually in your best interest, we will work to ensure that the terms of the bankruptcy are beneficial to you.
Call us today for a consultation to discuss your case at 1-855-DOC-LAWS.