Business bankruptcy is a situation in which a business organization has more liabilities than assets and is no longer capable of meeting its financial obligations. Any type of business can file for business bankruptcy.
Business bankruptcy can provide relief to the business owners who are overwhelmed with credit problems and cannot find any other way out of debt. However, business owners must also face the fact of losing one’s business and damaging one’s credit standing and endure embarrassment is a possibility. There is not much stigma attached to Business Bankruptcy because it is, in fact, used by many businesses to restructure their companies.
Though Business Bankruptcy may seem different from personal bankruptcy, they both target the same goal: a way out when all possible solutions fail to alleviate the current situation.
When a business or a company is on the verge of forfeiting payments on a debt, it is the sign for an owner or manager to know that the time has come to file for business bankruptcy.
Are there any differences between the different business bankruptcy types?
There are 2 main types of business bankruptcy: chapter 7 and chapter 13, but the latter has more advantages than the former because it is federal bankruptcy, and the law does not require the liquidation of the business itself. As an alternative, the company will have to fulfill paying the debt according to the agreement with the creditors. The company has the chance to recover from the debts and can make profits again. But any decision-making has to be pre- approved by the federal court as the business bankruptcy law stipulates.
Brandon O'Brien is the current manager of a company that filed for bankruptcy after following our professional advice and is currently following making his compulsory payments. Business bankruptcy has helped him regain the company’s financial control and has given him a new way of dealing with the debt problems the company has carried for many years and has not yet solved them.
Brandon O'Brien:
What should I do after filing for Chapter 11 Business Bankruptcy?
James Banks:
Chapter 11 Business Bankruptcy allows the company to keep its assets. Nevertheless it is recommended some bonds be liquidated in order to pay off part of the debt. The amount can be reduced, and the payment will not be too high; allowing the company to generate profit after all. Regardless of what method you use to reduce the debt, the manager of the company has to regularly report to the federal court any decision made in the company.
Brandon O'Brien:
So, after filing for Business Bankruptcy, do the lawyers take care of everything?
James Banks:
Do not believe that by filing for Business Bankruptcy your financial situation will be resolved. You, as the manager will have to make sure that the company has enough cash to endure the whole filing process, and we recommend that you follow a plan in order to avoid any type of delay during the case.
One way to take care of creditors once and for all is to put them all together and set up a plan to start the repayment process. The debt will be reduced, and the creditors will see you are in the process of paying them. This creates trust and understanding as to why you file for bankruptcy.
Remember, filing for Business Bankruptcy is a serious decision, and one that should only be considered when all other options have been tried. It would be wise to seek advice from a financial and legal professional before making any sudden decisions.
We have different articles of interesting topics and current and former clients’ experiences with our programs. Take a look at topics related to Business Bankruptcy, situations in which people can fall into and how to keep yourself a debt free person.
http://www.buzzle.com/articles/business-bankruptcy-saving-company.html
