If you own a new business and you are experiencing financial difficulties, you may find yourself wondering about regulations regarding new business bankruptcy and even if you can file for bankruptcy. During such difficult financial times, it is important to keep in mind that most new businesses struggle from time to time. It is a good idea to consider whether there may be financial alternatives that would allow you to get through that period without filing for bankruptcy. If you realize that you simply cannot meet your financial obligations and have more unsecured debt that you can possibly pay, then bankruptcy may be the right option.

In this case, you should understand how the new business bankruptcy laws affect you. The new business bankruptcy law is known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, also referred to more simply as BAPCPA. The last time a major revision was made to bankruptcy laws was in the 1970s. The goal of the current law is to eliminate or at least minimize what many see as abuses of the original Bankruptcy Code.

Under the new business bankruptcy laws, individuals and businesses are essentially limited from using the bankruptcy laws to get rid of their debt. Chapter 7, which is the form of bankruptcy that is used to discharge debt, was not completely eliminated under the new business bankruptcy laws. That said, it is now more difficult for businesses and individuals to qualify for Chapter 7 bankruptcy. If a business is not able to qualify to file for Chapter 7 bankruptcy under the new business bankruptcy laws then they may still file for bankruptcy under other options, but that will mean they must develop a repayment plan.

If you own a relatively new business and you are thinking of filing for bankruptcy, it is important to keep in mind that once you file for bankruptcy you will not be able to file for bankruptcy again for another eight years. In addition, you may find it difficult to open another business in the ensuing years due to difficulty in attaining credit. Within a couple of years following the resolution of your business bankruptcy case you may be able to obtain secured debts, but it is often far more difficult to obtain unsecured credit. This is why it is critical that you carefully think through the consequences of filing for bankruptcy and only file if you think that it is really the only option that is left open to you.

Consulting a business bankruptcy attorney can make it easier to understand the different bankruptcy options that are available as well as the consequences of each option. An experienced business bankruptcy attorney will be able to help you through every phase of the process if you do decide to go ahead and file for bankruptcy. With the right guidance, bankruptcy can provide businesses with a fresh new start, especially if you opt for Chapter 11 bankruptcy and the option to develop a repayment plan.

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