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Los Angeles California Bankruptcy Blog

Navigating business debt and a lease

Commercial evictions can occur in much less time than a residential eviction. If you start falling behind on the rent on your business location, you need to work fast. You will need to take a thorough and honest look at your business, its daily operations, prospects and the ability to bring more capital to the table.

Negotiate

Beware of merchant cash advances

Merchant cash advances seem to offer advantages to a business that needs some extra liquidity, but nothing could be further from the truth. These advances work by loaning you money that you reimburse on an ongoing basis with payments from your credit or debit card sales. Another merchant cash advance method takes fixed debits from your bank account on a daily or weekly basis.

Frustration With Traditional Banks

Give me a break!

What’s the big deal about work rest periods? Two 10-minute breaks during an eight-hour shift may seem like an insignificant amount of time, but it does add up.

Company violations of rest period policies are part of an explosion of class-action lawsuits against employers. Here are some of the basic regulations from the California Department of Industrial Relations and how to stay on the right side of them.

5 Common reasons for business bankruptcies

Owning your own business is a demanding endeavor. It takes intelligence, perseverance and some luck as well. Just as there are many reasons for business success, there are reasons for difficulties in the pursuit of entrepreneurial gain. Here are five common reasons why a business may head toward bankruptcy.

  1. Increase in Competition

Bankruptcy's role in saving a company

When California business owners realize their business is struggling, they may feel like they have few options to save their company. Sometimes bankruptcy may the answer a company is looking for.

Some people may worry that they will be unable to keep their business if they file for bankruptcy. Chron.com says that this usually depends on the kind of bankruptcy a business owner files for. People who file for Chapter 11 can typically keep their business up and running. This is because this type of bankruptcy includes a debt repayment plan. This debt is usually repaid with money the business makes as it continues to operate. If someone decides to file for Chapter 7, the ownership of the company generally determines whether the business remains open. People typically need to file a bankruptcy petition if they are a co-owner of a business. In this situation, the business may close because it is the company's assets that are sold to repay this debt. If someone is the sole owner of a business, he or she can usually keep the company running because he or she can choose to file for personal bankruptcy.

The Toys ‘R’ Us Bankruptcy And Its Impact

The iconic retailer Toys ‘R’ Us filed for bankruptcy last year and has announced that it will close 800 of its stores in the United States. Customers finding lower prices shopping online or at other big-box retailers have hurt sales during the past several years as the company has struggled with $8 billion in debt.

The news affects about 33,000 employees, but the company’s financial problems could also hurt other businesses that fill the shelves of Toys ‘R’ Us with their products. Some of the country’s largest toymakers -- such as MGA Entertainment, which includes brands such as Little Tikes and the popular L.O.L. Surprise! – supply products to the chain. Some have d whether Toys ‘R’ Us had stopped paying its suppliers after filing for bankruptcy.

Do not believe everything you hear about bankruptcy

Chances are that you have heard many of the myths and half-truths floating around concerning the bankruptcy process in California. One of the misconceptions we encounter most frequently concerns eligibility for the Chapter 13 process. Here at Weintraub & Selth, APC, we believe that there is a best-case debt relief option available for every situation. For you, even if you are representing a business, that option could potentially include Chapter 13. 

Understanding your debt relief options is the first step towards choosing the correct one. We provide an overview of the Chapter 13 process on our main bankruptcy website. The important milestones include:

  • The court halts creditor contact and collection upon your filing for bankruptcy
  • You build a debt plan
  • You repay your modified debt and receive a discharge on the balance

Mixing personal and business assets: Signs of financial stress

Starting a new business is hard and it's nervewracking. While you didn't plan to fail, you also didn't fail to plan. As a sole owner, you no-doubt looked into the various start-up options to determine which tax entity would offer you protection from personal tax liabilities, as well as asset protection in the event of bankruptcy.

As business slows, as it always does in any business' life-cycle, you may have commingled your personal resources with your business needs, or dipped into business assets to meet personal obligations. But are you starting to commingle your personal and business financial resources too frequently? It may be one of the signs that Chapter 11 bankruptcy may be your best option.

This post, we'll look at some signs to take into consideration when deciding how to move forward.

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