So after 2 years of getting my act together, I finally filed this past week. It's a no asset, non-consumer chapter 7.
My situation: my company started tanking in 2008 and I managed to keep it going until 2010 until finally packing it in. Like many small business owners, I had personally guaranteed a lot of the bank loans and equipment leases which all accelerated after the company stopped paying its bills.
After interviewing several BK attorneys I actually chose the most expensive one. He walked me through where the trouble spots were and gave me a framework for what documents I needed to prepare and how to minimize the risk of levies and garnishments in the meantime. We also talked about timing, waiting to file so I can spend down assets in an appropriate manner. His advice jibed with common themes here of: don't rush, hide nothing, and gather all the your relevant records so the trustee doesn't have to take your word for it (since they won't).
Sadly, this was also the time I came to realize how important it is to have good bookkeeping and a competent tax accountant. Since I had neither, it would take a lot of time digging and refiling to correct several years of sloppiness. My best advice to owners with struggling companies is to not let your good record keeping habits slip when things get tough. That's exactly the time that you need everything in the right place.
On a brighter note, I had loaned money to the company years earlier and was able to deduct the balance as a business bad debt, receiving some sizable tax refunds for the previous 3 years. I then used these to live off and pay my attorney while preparing all the other corporate filings necessary to close things and sorting through boxes of poorly organized records.
I want to thank everyone on this site for being here and willing to answer my odd questions, and more importantly the general advice to 'breathe' and take the time to get it right. Prior to finding this site, I was constantly panicked that everything would come crashing down quickly, never realizing that anything that involves the court system is not terribly fast at all. I feel relieved that it's finally proceeding and confident that the filing is the best case I can present.
I also sat in on a few 341 meetings and court hearings. It further reinforced the sense that everyone's happier when a case is well prepared and these trustees and judges have seen every trick in the book, there's really no fooling anyone. As a side note, the bankruptcy courts in Brooklyn are gorgeous.
When things were going down with the business, I remember how convoluted my thinking was in an increasingly impossible situation. Despite reality, I still felt I could turn it around like I'd done so many times before. I only hope if there's ever a next time, I'll think more clearly, act more decisively, and be able to minimize the pain for all involved.
My situation: my company started tanking in 2008 and I managed to keep it going until 2010 until finally packing it in. Like many small business owners, I had personally guaranteed a lot of the bank loans and equipment leases which all accelerated after the company stopped paying its bills.
After interviewing several BK attorneys I actually chose the most expensive one. He walked me through where the trouble spots were and gave me a framework for what documents I needed to prepare and how to minimize the risk of levies and garnishments in the meantime. We also talked about timing, waiting to file so I can spend down assets in an appropriate manner. His advice jibed with common themes here of: don't rush, hide nothing, and gather all the your relevant records so the trustee doesn't have to take your word for it (since they won't).
Sadly, this was also the time I came to realize how important it is to have good bookkeeping and a competent tax accountant. Since I had neither, it would take a lot of time digging and refiling to correct several years of sloppiness. My best advice to owners with struggling companies is to not let your good record keeping habits slip when things get tough. That's exactly the time that you need everything in the right place.
On a brighter note, I had loaned money to the company years earlier and was able to deduct the balance as a business bad debt, receiving some sizable tax refunds for the previous 3 years. I then used these to live off and pay my attorney while preparing all the other corporate filings necessary to close things and sorting through boxes of poorly organized records.
I want to thank everyone on this site for being here and willing to answer my odd questions, and more importantly the general advice to 'breathe' and take the time to get it right. Prior to finding this site, I was constantly panicked that everything would come crashing down quickly, never realizing that anything that involves the court system is not terribly fast at all. I feel relieved that it's finally proceeding and confident that the filing is the best case I can present.
I also sat in on a few 341 meetings and court hearings. It further reinforced the sense that everyone's happier when a case is well prepared and these trustees and judges have seen every trick in the book, there's really no fooling anyone. As a side note, the bankruptcy courts in Brooklyn are gorgeous.
When things were going down with the business, I remember how convoluted my thinking was in an increasingly impossible situation. Despite reality, I still felt I could turn it around like I'd done so many times before. I only hope if there's ever a next time, I'll think more clearly, act more decisively, and be able to minimize the pain for all involved.
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