Will You Lose Your Business In A Bankruptcy?
Filing for bankruptcy can give rise to certain uncertainties especially regarding the survival of your business. Bankruptcy doesn't usually mean that the end has come for your business. However, many businesses have closed shop soon after declaring bankruptcy. Therefore, it makes sense for you to be concerned about your business.
Your business will neither be saved or doomed by declaring bankruptcy. Although the factors surrounding bankruptcy will play a part in determining your business' future, there are many other factors that will contribute to this as well.
Are Your Financial Challenges Temporary?
The nature of the financial challenges that have forced you to take on debt is, perhaps, the main factor that will determine the future of your business. Some financial challenges are seasonal or may be brought on by events that are sure to pass in the near future.
In such situations, the objective of filing for bankruptcy is to keep the creditors at bay long enough for your business fortunes to change. Filing for bankruptcy can protect some of your vital assets from getting ceased by creditors. Filing for Chapter 13 bankruptcy can also give you the respite you need to get your house in order.
How Do Your Assets Compare to Your Debts?
Filing for bankruptcy doesn't mean that a company or business is broke, it simply means that it has a lot of debt. As long as the business is still making money, it has a good chance of surviving bankruptcy.
Businesses in this situation are the reason why chapter 12 bankruptcy exists. When a business' assets are liquidated, creditors may not get all their money back. Chapter 12 bankruptcy gives the business time to reorganize its assets and restructure its debt so it can come up with a plan to pay off creditors. This can be good for both the business and the creditors, and it's very feasible if the business is making money or has significantly larger assets compared to debts.
One of the main mistakes entrepreneurs make is not knowing when to quit. Although you might pour your heart and soul into it, it's very important to know when it's time to stop funneling money into your business.
It's important to be realistic about the nature of the challenges facing your business and your ability to overcome these challenges. Talk to a bankruptcy attorney or specifically seek out chapter 13 bankruptcy attorney services to find out whether bankruptcy is the right choice and how you should proceed afterward.