In order to effectively determine what the appropriate bankruptcy avenue should be for a given individual or entity, multiple steps should be considered.
Where did the debt come from?
The first question is to determine what caused the individual or corporation to accumulate the amount of debt owed. For example, an entity may have a hardship due to the pandemic, a particular event, or an assessment on taxes. Each circumstance may require the filing of a different bankruptcy proceeding.
What is hoped to be accomplished by the bankruptcy?
After that is determined, the next question is what the end goal is for the client. For example, does the client want to continue their business or cease operations and start a new entity?
Can you work with the creditors to stay in business?
Finally, there should be a rough estimate of what the businesses current assets, liabilities, income, and expenses are. If the debtor has been assessed a tax by the IRS or the debtor is working with a creditor on a continual basis, bankruptcy may not be an appropriate option.
Rather, talking directly with, for example, the IRS or creditors may be better options depending on what the end goal is. If so, there may be a way to work out payments with the IRS or creditors to remain in business.
About the Finkel Law Group
Finkel Law Group, with offices in San Francisco and Oakland, has more than 40 of experience assisting our clients navigate federal bankruptcy laws and state insolvency statutes. Our attorneys have the experience and expertise needed to help you and your management team successfully complete the liquidation or reorganization of your corporation, partnership or limited liability company.
When you need intelligent, insightful, conscientious and cost-effective legal counsel to assist you with the bankruptcy and reorganization issues confronting your company please contact us at (415) 252-9600, (510) 344-6601, or info@finkellawgroup.com to speak with one of our attorneys about your matter for a cost-free consultation.