Did you ever hear a business owner talking about their Bankruptcy Attorney? Imagine you are at a cocktail party and you hear a small business owner say: “I’ve got the best Bankruptcy Attorney in town.” or “My Bankruptcy Attorney saved me a fortune.” This never happens, but it should. Business owners are too busy running their businesses to think about things that have nothing to do with running the business, well almost nothing. When they need advice, they meet with management and accountants rather than a bankruptcy attorney. However, when a business owner is at a cross-road and then you know what hits the fan, guess who they are in a hurry to meet with? That’s right, their favorite bankruptcy attorney.
I wish more small business owners would make it a priority to discuss their financial issues with a bankruptcy attorney before the fan gets turned on. The way I see it, there are 5 main areas where a bankruptcy attorney can provide support and advice to many small business owners.
1. Cash Flow Analysis 2. Debt Management and Debt Restructuring 3. Credit Issues 4. Collecting Receivables 5. Disaster Planning.
Unless you are a one man show who works from home with no debts, the chances are that your small business will need access to capital to either operate or expand. As the business expands, it may need inventory, equipment and access to a credit line. Again, this list is not exhaustive, but it will assist the small business owner in developing a list of idea/issues to keep in mind. I see many business owners that sign whatever the banks put in front of them to get access to capital so they can run their business this week, month or year. They are not thinking about the ramifications of a personal guarantee. They are thinking payroll on Friday or bidding on the next job.
An experienced bankruptcy attorney can provide insights to the small business owners. An experienced bankruptcy attorney has a wealth of knowledge that comes with the territory. They have seen how a relatively small business decision can wreak havoc on the owner’s family. I have seen businesses that thrived and those that have crashed and burned. I have seen businesses that appeared to be stable but were really a train wreck waiting to happen.
Some businesses know that without cash, you cannot start, operate or expand a business. Some small businesses have a little debt that needs to be managed, and other businesses have quite a bit more. Projecting cash flows will help the business owner make better decisions about what to do in times of surplus cash and what to do in leaner times.
Who better to assist small business owners when it comes to debt management and/or debt restructuring? If your business has already taken on debt, a bankruptcy attorney can assist in managing the existing debt as well as restructuring the existing debt, if possible. Enough said on this one.
Rarely does a small business owner have a written credit policy in place, and what I usually see is the small business owner extending credit on a handshake and a promise of payment on Tuesday for a hamburger today. Credit issues can cripple a small business and put it out of business. Bankruptcy attorneys know the difference between secured creditors and unsecured creditors and how each of these creditors are treated when a business files for bankruptcy protection. Bankruptcy attorneys also know how to perfect a security interest to protect the collateral when necessary.
An experienced bankruptcy attorney has dealt with every type of debt collector known to man. It is another one of those things that comes with being a consumer protection attorney. Well, small businesses that are collecting their own debts may need assistance collecting on their debts or they need to know what is legal or not when collecting debts. On the other hand, a bankruptcy attorney would do well to be involved on the establishment of a small business policy of receivables management.
Bankruptcy Attorneys are usually called in to do the final preparations after a disaster strikes. Sometimes, we look at the remains of a business and say: This didn’t have to happen. Every business needs a disaster plan. What happens if ??? That kind of planning is not fatal to a business. Disaster planning actually makes quite a bit of sense. A business owner needs to know what to cut first, second, etc.
So, this is why every small business owner needs to know an experienced bankruptcy attorney.
-Carmen Dellutri, Esq. via bankruptcylawnetwork.com
For bankruptcy information call Kasen & Kasen to schedule a FREE INITIAL CONSULTATION (856) 424-4144. The attorneys at Kasen & Kasen have over 40 years experience representing consumer and business debtors in bankruptcy. David Kasen is board certified as a specialist in BOTH consumer AND business bankruptcy law. Find out more about our firm by visiting www.kasenlaw.com.