Should Your Small Business File For Bankruptcy?
It can be challenging for new business owners to stand by and watch the company they have worked hard to establish begin to struggle. You may not be sure what steps to take in order to alleviate the financial burden causing your small business so much distress.
Business owners will often view bankruptcy as a sign of failure, when bankruptcy can actually be a valuable tool that will help you manage your financial obligations and protect your fledgling company.
Talk to a bankruptcy attorney to review your options and determine if it's time for your small business to file for bankruptcy.
You Want to Stay in Business
You will need to ask yourself if you want to stay in business before determining if your company should file for bankruptcy. Small businesses can be challenging to market and grow, and some business owners may not see the value in continuing to pursue success.
If you have no desire to remain in business, an attorney can assist you with the dismantling of your small company. If you do want to continue running your company, then filing for bankruptcy will give you that option.
You Have a Plan
It's important to create a plan for the future before your small business files for bankruptcy. Take the time to work with an attorney to determine how debt restructuring would change the financial obligations of your business.
Identify new sources of revenue, and estimate the costs required to develop these new sources. If you are able to show a positive proposed balance sheet when evaluating your post-bankruptcy business, then filing for bankruptcy can be a great tool to help you become more profitable in the future.
Your Financial Struggles Are Temporary
A lot of small businesses will go through lean times. Whether your business is seasonal in nature or you have been affected by mandatory shut-downs, a bankruptcy could help. Filing for bankruptcy protects your small business with an automatic stay.
Creditors can no longer collect from your business once you have filed for bankruptcy, giving you time to stockpile resources.
An experienced attorney can help you negotiate with your creditors to create a more feasible repayment plan. Any creditors who are recalcitrant to negotiate can be compelled to lower your debt by the court after your bankruptcy is discharged.
Some of the most successful companies in the country have filed for bankruptcy at some point. Evaluate your small business carefully to determine if bankruptcy could help you get the fresh start you need to become more successful in the future.
To learn more, reach out to a business bankruptcy lawyer today.
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