Bankruptcy Indiana

It's not personal, but of course it is - small business bankruptcy, I mean.

The number of Indiana small business bankruptcies continues to increase.  As a bankruptcy attorney in Indiana who's provided legal counsel for small business owners for many, many years, I feel special empathy for entrepreneurs who've sacrificed to build their businesses, only to come to the realization that their business is in grave danger. They may start by asking my advice as a debt consolidation lawyer in an attempt to help their business survive, but end up needing Indiana bankruptcy help.

According to the Pittsburgh Business Journal, small business bankruptcy filings across the nation jumped more than a third during this calendar year. Many of these businesses start out filing Chapter 11 bankruptcy, meaning the companies are hoping to restructure and survive, and merely want to "shelter themselves from the financial storm."

What I and the Columbus bankruptcy lawyers who work with me there are finding is this: Many small business owners who start out with filing Chapter 11 bankruptcy are forced to convert to Chapter 7 liquidation bankruptcy.  They simply cannot find funding from the bank or from investors to complete a successful Indiana Chapter 11 bankruptcy reorganization plan.   

A year and a half ago, I was filling my Indiana bankruptcy blogs with examples of companies who had successfully emerged from bankruptcy.  I talked about Hancock Fabrics using bankruptcy to buy time to hold going-out-of-business sales.  I told how W.R. Grace used bankruptcy to allow them to continue making contributions to their employer retirement plan.  I shared how Dura Automotive had emerged from bankruptcy as a new public company.

Today, however, small businesses seem to be caught in what Cal Bellamy, partner with Krieg DeVault LLP, calls "the perfect storm".  They have difficulty obtaining credit from the banks for daily operations.  Meanwhile, orders are being reduced from their customers, and many customers who do order are slow to pay.

Georgia State University professor Jack WIlliams summed up the situation: "I think what we're seeing is a significant increase in bankruptcy filings in the small business area, among businesses that would have traditionally weathered the economic storm."

Over the years, many small Indiana business owners have sought my advice, not expecting to file bankruptcy, but simply wanting to protect themselves by managing debt.
The realities today for small business owners are quite harsh.  If sales are down and going lower, lenders may refuse to grant any more credit.  As Moody's Investors Services put it, "It's a terrible time to be cash-poor."

As a small business bankruptcy attorney in Indiana, I find myself doing a lot of empathizing - and a lot of work these days with entrepreneurs.  I often need to remind business owners that it's precisely for situations like theirs that the bankruptcy system of law was created, and that it's precisely those kinds of situations my professional life is all about!