spot_imgspot_img

Can bankruptcy give a new life to your business when your company is going under?

Are you someone who has been pondering over the financial health of your business? Do you think your business firm is knee-deep in debt and has no way out? If business debts have started interfering with your personal life, you might as well consider business bankruptcy options. 

Besides the confusion that comes along with not understanding the legal jargon associated with bankruptcy, this is an overwhelming process. Before you choose bankruptcy in Orlando, read the concerns of this article to educate yourself on the heads and tails of bankruptcy. 

Potentials reasons behind filing business bankruptcy

During tough times, when your business has no positive turnovers to look forward to, bankruptcy might be the sole option left. Here are a few reasons to file for business bankruptcy:

  • To put down your shutters as soon as you can: If you file for bankruptcy, you no longer have to worry about concerns like selling off your inventory, collecting unpaid payments, or letting go of your business equipment. You can close your business immediately. 
  • To keep your company afloat: On the contrary, if you wish to keep your company operating, you can file for bankruptcy. This option will let you continue your business on a slower scale while reducing your debt. 

But what are the causes of business bankruptcy? Well, you might be left with bankruptcy as the only option due to:

  • Lack of favorable market conditions
  • Hasty decisions are taken in the past
  • A dearth of adequate financing
  • Lawsuits
  • Problems in cash flow

Types of business bankruptcy you can file

CHAPTER 13 BANKRUPTCY

See also  Get World Class IT Solutions Virtual Assistant in New York at Unbeatable Cost

To be honest, Chapter 13 bankruptcy is more apt for individuals. However, sole proprietorship businesses can file for this type since these are indistinguishable from the business owners. If you want to just reorganize your debts rather than opting for liquidation, Chapter 13 is a viable option for you. The court will provide you with an alternative debt repayment plan and tell you how to repay your delinquent debts. 

CHAPTER 7 BANKRUPTCY

When you foresee no future for your business, Chapter 7 is the best option. This bankruptcy type is also called liquidation. If your business debts are extremely overwhelming and you are sure you can’t pay them back even through reorganization, file for Chapter 7. Before the court approves this type for your business, the business owner has to pass the ‘means’ test. Once he qualifies, a trustee will be assigned by the court to possess all business assets and disburse them among creditors. 

CHAPTER 11 BANKRUPTCY

In case you have a realistic chance of turning things around, Chapter 11 bankruptcy can be a worthy option. This type is commonly used by corporations and partnership businesses. Sole proprietors also use this type when their income levels are extremely high to qualify for a Chapter 13 debt repayment plan. In this type, the company will file for a detailed debt reorganization plan to repay its creditors. 

Therefore, if you’re a poor business owner who is worried about the fate of your business, you may think of considering the above-listed bankruptcy options.

Latest

10 Important Tips for Students to Ensure Success

Students are more interested in social media than in their studies these days. It is crucial to make a routine that helps focus on...

Ways To Customize Your Kitchen

No one wants their kitchen to look drab, boring, or just like the home next door. Making your kitchen unique does not have to...

Is Your Pay Keeping Up with Inflation?

Your boss bumped up your pay at the end of last year. Now you’re coming into 2023 with a slightly bigger salary to help...

Why There Are Some Fake Rumors About the Rajiv Gandhi Hospital Scam?

Introduction Rajiv Gandhi Cancer Hospital has been a renowned name in the medical industry for a long time now. It is known for its medical...

How to Choose The Right Metal Laser Marking Machine

When it comes to industrial manufacturing and processing, laser marking has become an increasingly popular method for creating accurate and durable markings on a...