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Los Angeles California Bankruptcy Blog

Knowledge is power: reaching an informed debt-relief decision

Many business owners across Los Angeles and Southern California reasonably assume that reaching out to a bankruptcy attorney for debt-linked assistance will result in guidance that promotes the upsides of a bankruptcy filing.

After all, providing legal counsel that stresses bankruptcy is what a bankruptcy legal team centrally does, right?

After more than a century of success, FTD files for bankruptcy

In today’s world, no company is immune from the pressures of market competition, regardless of how long that company has been around. Even time-tested ideas like flower and gift delivery can prove to be unprofitable if the company encounters an unforeseen problem or makes an unsuccessful business decision.

Florists’ Transworld Delivery (more commonly known as FTD Companies Inc.) recently announced that it is filing for Chapter 11 bankruptcy, citing about $200 million in debt from a competitor acquisition that didn’t work out. In 2014, FTD purchased rival company ProFlowers to eliminate a competitor and to merge the two companies into a larger, more streamlined venture.

Equipment purchases: A common source of debt for small businesses

One thing that can have big impacts on a company's success is what equipment it has. There are many industries in which having up-to-date equipment is critical for a business when it comes to staying competitive. Getting the machines, devices and technology one's company needs can be expensive. So, it is not uncommon for business owners to take on debt to buy new or upgraded equipment.

Sometimes, entrepreneurs turn to specialized equipment loans to finance such purchases. These are loans given specifically for the buying of business equipment. In this type of financing, the machines and devices purchased with the loan serve as collateral.

Business bankruptcy: Deciding between Chapter 11 and Chapter 7

If you own a business that’s in financial trouble and headed toward bankruptcy, you need to decide whether to file Chapter 11 or Chapter 7. Pursing a Chapter 7 will mean the end of your business and the liquidation of assets, but the process will be over relatively quickly and efficiently. Chapter 11 allows you to restructure and keep your business open, but it is a much longer and more complex process. And it isn’t always successful.

So how do you choose one over the other? That’s what we’ll discuss in today’s post. If you are leaning toward Chapter 11, you’ll need to answer the three questions below (in consultation with an experienced bankruptcy attorney, of course). 

A fresh start: Building a new business after bankruptcy

Owning a business is the dream of many entrepreneurs around California. And even after filing Chapter 7 bankruptcy to relieve past debts, many business owners do not abandon that dream.

Starting a new business after bankruptcy can have its challenges, but it is possible. Here are a few tips for business owners looking to create a new start-up.

Manufacturer cites materials price increases in Chapter 11 filing

Of all available forms of business bankruptcy, Chapter 11 is the only one that allows for restructuring of a jointly-owned business, LLC or corporation (Chapter 13 restructuring is only available for sole proprietorships). Although the Chapter 11 process can be difficult, it is an opportunity to revive a business that may still be viable despite unanticipated hardships.

Many companies find themselves in situations like this because the economy is unpredictable. Even factors like fluctuations in the cost of manufacturing materials can severely strain a business’ bottom line. This was one of the factors cited in a recent Chapter 11 filing by Florida-based Hollander Sleep Products, which bills itself as the largest manufacturer of bed pillows in the world (it also makes other bedding products as well).

Is student loan debt eligible for bankruptcy?

People continue to struggle with student loan debt. The only form of debt that causes more hardship is mortgage debt. Student loans beat out credit card debt and surpass health care expenses. Unfortunately, unlike credit card debt and health care expenses student loan debt is not as easy to manage.

Pros and cons of Chapter 11 bankruptcy

As a business owner, juggling mounting debt, calls from creditors, the threat of losing your business and more can be overwhelming. Whether your business is a sole proprietorship, partnership, LLC, corporation or more, you may question what the best route forward is when finances dwindle and your options seem scarce.

When your company faces seemingly insurmountable financial woes, filing for bankruptcy may provide both the relief and decisive action you need. Many businesses can benefit from Chapter 11 bankruptcy, particularly if you wish to recover your company and move forward, rather than shut the doors. However, Chapter 11 has both pros and cons for any company:

A closer look at liquidation for business owners

A common term associated with filing Chapter 7 bankruptcy is "liquidation." Many California business owners understand the term well. After all, businesses do not have to file bankruptcy to liquidate their assets. However, it can be difficult to know where to start when it comes to filing bankruptcy and proceeding with liquidation.

So, here is a closer look at what liquidation means for businesses.

Three things business owners should consider before bankruptcy

The decision to file bankruptcy is not always an easy one for California business owners. They worry about how bankruptcy might impact their business and their own current finances. 

While bankruptcy can have many benefits for small businesses, many variables can impact what chapter a business owner should choose. Here are a few questions that all business owners should consider before filing bankruptcy to relieve their debts.

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