Surprisingly, a study sponsored by the U.S. Small Business Administration found that many small businesses with less than 500 employees that went into bankruptcy were rejuvenated as successful business ventures within seven years of the bankruptcy discharge. The purpose of the Bankruptcy Code with respect to small businesses in Pennsylvania and elsewhere is to give them a set of remedies that will help them pull out of financial difficulties and move forward to become successful. Chapter 11 is the usual choice for a small business that wants to remain operational during and after a bankruptcy.
Chapter 11 can present the small business owners with some complex choices. That is part of the reason why every small business that ventures into bankruptcy needs a seasoned, experienced business bankruptcy attorney to protect the best interests of the business. A Chapter 7 filing is designed for businesses that will be wrapping up their affairs, selling assets, paying bills and closing down. No matter which way a business decides to go in bankruptcy, there is a future after the proceedings are completed.
In the event of a closing of the business, the road ahead is wide open to start again and try it anew. It will not be difficult to find suppliers, banks and other business resources to work with, as long as a consistent, focused effort is put forth. It may be easiest to start with other small businesses to build up a new network of suppliers and vendors.
For the owner or executive of a small business in Pennsylvania and elsewhere, there are numerous tried and true techniques for restoring credit after a personal bankruptcy. That is an extensive topic that requires sufficient time and space not available here. However, for one who is ready to commit to a focused effort to fix his or her credit record, the results will be surprisingly gratifying. All new accounts should be reported to Dun & Bradstreet so that the improved new credit record can be properly recorded and reported.
Source: The Huffington Post, “Life After Bankruptcy: When and How Your Business Can Get Its Financial Groove Back“, Jared Hecht, Sept. 2, 2015