MANY SMALL BUSINESS OWNERS UNAWARE HOW BANKRUPTCY CAN HELP THEM

As a result of the fiscal impact of COVID-19, researchers from Brigham Young University, Harvard University, University of Chicago and University of Toronto, partnered with SCORE to survey small business owners’ perceptions of bankruptcy and their knowledge of the process as a tool for debt relief. The results of the survey indicate that small business owners are both largely unaware of how bankruptcy can help them and concerned with a perceived stigma of filing.

• 30% of small business owners stated they were uncertain if they would remain in business over the next year.
• 34% of small business owners reported “a good understanding of the bankruptcy system.”
• 65% of small business owners agree that it would be embarrassing for a business owner to file.
• 60% agree that friends and family may look down on them for filing.
• 54% say that clients would be less likely to buy goods or services from a business owner who filed for bankruptcy.

This perceived stigma likely plays a role in keeping these respondents from learning more about bankruptcy and keeps them trapped in debt they could be discharging by filing. However, when these same small business owners were shown an educational video about the bankruptcy process, their comprehension of the process and perception of others who filed improved.

• 74% of respondents who watched the video were able to correctly answer questions about bankruptcy options and benefits as opposed to 40% of those who did not view the video.
• 25% of small business owners who saw the video proceeded to disagree with the negative stigma around bankruptcy, compared to 17% of the group who did not watch the video.

Are you a small business owner looking for debt relief, but are unsure of if bankruptcy can help? To see how we can help you today, please feel free to reach out to your Yuba City bankruptcy attorney at (530) 797-4402.