When your small business is struggling, it can be difficult to know what to do. When you’ve hit the breaking point, bankruptcy may be your only oWhen your small business is struggling, it can be difficult to know what to do. When you’ve hit the breaking point, bankruptcy may be your only option. As hard as it is, don’t check out of the process. How you handle failure will be the greatest indicator of future success. There will be other chances in the future. Here are some of the steps that will help you to get through the bankruptcy process.
Consider Your Options
The type of business that you’re running will dictate the type of bankruptcy that you’ll want to file. Whether you deal in products, services, or even real estate will make a difference for the big picture. If you’re trying to liquate your assets in order to pay off debts, Chapter 7 of the bankruptcy code is the right option. When you’re trying to reorganize in order to get back into business, Chapter 11 is the one for you. There are also Chapter 12 and 13 which may apply to you depending on your situation.
List Your Assets
Listing out all of your assets starts the process so that you can absolve your outstanding debt load. The second part of this is listing out your creditors and how much you owe to each of them. This will essentially give you a balance sheet to determine if your assets will be able to cover the debt that you’ve accumulated. In some instances, you may be able to work with your creditors to pay them back on a payment schedule or at a reduced rate.
Contact Legal Counsel
There are lots of things that you’ll need to consider when your business is undergoing bankruptcy proceedings. Hiring law firm services will ensure that you limit your personal liability in terms of your business dealings. They can help you through the process in a step-by-step fashion. Many times, your attorney will be able to help you with the negotiation process when it comes to getting the money back to your creditors.
Make the Announcements
Tell your employees that your business is closing as soon as possible. This gives them advance warning so that they can start preparing. As a part of your announcements, you may decide to have a going out of business sale. This can help to generate some much needed revenue to get you out from under your creditors. There are instances in which your creditors will be involved in the closing of your business. This will depend on your business model among other factors.
Going bankrupt in business doesn’t need to spell the end of your financial future. Use these tips to help you through the process and get back on the road to stability.
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