Nearly all businesses, especially smaller organizations, must take on debt to achieve initial growth. But not all of them can bring in enough profit to pay off these balances in a timely fashion. In situations where your company has more debt than you can afford, you might consider commercial bankruptcy. While this legal action can eliminate money owed, it might mean giving control over to a trustee, spending years in courts, or losing your business altogether. If you’re considering bankruptcy, but want to avoid those risks, here are three alternatives you may want to discuss with a skilled attorney.

3 Alternatives to Small Business Bankruptcy

1. Negotiation

Negotiation is one way to restructure debts and keep your small business afloat without having to involve the courts. Through this option, your attorney will work with your creditors individually to identify ways to minimize balances and pay off debts in a more reasonable time frame. Although the results will ultimately depend on the willingness of your lenders, most will favor the idea of receiving some money rather than no funds at all. This option will also save you the time and money that would be required for a commercial bankruptcy case.

2. General Assignment

General assignment is a process that involves minor input from the court and requires you to sell off select assets to pay off debts. While this option is somewhat similar to a Chapter 7 bankruptcy, it still provides you control over which assets are sold and who they pay off. By contrast, Chapter 7 will place all decisions in the hands of a trustee. In addition to providing more versatility, general assignment can save money on legal fees, and, in turn, help lenders receive greater payouts.

3. Sell Business

If you want to avoid the complication of commercial bankruptcy, you may opt to sell your business. This option allows you to keep your company alive under the leadership of a different owner. If you don’t want to sell your entire business, you may be able to broker deals with investors to sell off portions of the company instead.

While it’s possible for small business owners to dig their way out of debt, navigating the process can be challenging. That’s why Donald L. Spafford, Attorney at Law provides personalized assistance as a trusted bankruptcy lawyer in Honolulu, HI. With more than 30 years of experience in commercial law, this Oahu attorney will simplify the bankruptcy process and help you explore other viable debt relief options. Learn more about this lawyer’s approach to commercial bankruptcy online. If you’d like to discuss the specifics of your case, call (808) 532-6300 to schedule a free initial consultation.