When managing a business, there comes a point in time when you need to make a decision to finally throw in the towel. One of the hazards in business management is running out of capital to sustain your business. Aside from the capital, there are other financial issues that you need to address such as the taxes, operational expenses, employee salaries, and others. All this can lead you to finally decide to throw in the towel and file for bankruptcy. But is it really the right time to declare bankruptcy?
According to the website of Ryan J. Ruehle, LLC, there are many potential issues that will place your business in jeopardy and incur unbearable debt. In this article, we will help you decide when to finally declare your business as bankrupt.
1. Assess Your Situation
Bankruptcy has a significant and long term effect on your business that you need to give it a careful thought first. Is there really no other way to save your business than bankruptcy? Before finally giving up, see if you can still salvage whatever is left of your business. Can your funds still sustain your business? Are you burdened with too much debt? It is important to determine your financial position first before deciding to go bankrupt.
2. Is your situation temporary?
Before filing for bankruptcy, you may want to delay it for at least a few more months and see if your situation will improve. For instance, if you have recently lost income due to a lost job, see if you will qualify to avail of unemployment benefits.
3. Are you willing to take the risk?
When filing for bankruptcy, there is no turning back on your part. If within the period you applied for, you suddenly get money or land a high paying job, you cannot have your bankruptcy history removed from your record right away. You will have to wait until the expiration of the plan before getting another debt.
4. Is it really the best option?
Before filing for bankruptcy, you need to ask yourself if it is really the best option. You need to weigh the pros and cons to know if it is really the best option. If it is, then go ahead and declare your bankruptcy.
Proceeding with the Bankruptcy
If you decided that bankruptcy is indeed the best option, there are two ways you can go about with the declaration. The most common route is voluntary filing. The second way is to have the court order your bankruptcy.
Bankruptcy is a huge financial step that requires careful thought on your part. Look out for other alternatives first before taking it into consideration. To learn more about bankruptcy, click here.Read More »