Business owners can find themselves dealing with debt that seems impossible to manage. While there are strategies that are sometimes effective in reducing debt and keeping the company viable, they are sometimes a matter of too little too late. At this juncture, looking into the prospect of filing for business bankruptcy makes sense. Here are some examples of scenarios where the owner really needs to seek advice from an attorney.
The Business is Not Sustainable
For one reason or another, there is no hope the company will ever increase revenues and have the opportunity to expand. In fact, the opposite happens to be true. The future holds nothing but a decreasing client base and less revenue. In this type of situation, opting for a business bankruptcy that involves liquidation is the best move to make. The assets of the company can be sold in accordance with a plan approved by the court and clear up at least some of the outstanding debt. The remainder will be dismissed, and the company will cease to exist in any form.
The Company Could Recover
In situations where the company does have the potential to recover, the focus may be on seeking court protection to deal with current obligations while working toward making the business viable again. Under this type of bankruptcy protection, the court will approve a workable schedule for repaying those older debts. Once they are settled in full, the court will release the company from bankruptcy. With a little luck, the protection will be just what is needed to provide time for the business to attract more customers and once again be a profitable operation.
Remember that, in some situations, the recovery strategy will call for a reorganization of the company along with filing a plan for repaying those older debts. While this approach can be a little more involved, the right attorney can walk the business owner through the necessary steps.
For company owners who see no other alternative, it pays to seek professional advice about filing for bankruptcy. The team at Chicago Debt Solutions can evaluate the situation and help the client determine the best type of bankruptcy protection to seek. Doing so will make it possible to settle old debts and have the chance for a fresh start. You can like them on Facebook.