Business Bankruptcy Options Simplified

Apr 9th, 2014 | By | Category: Debt

It is well worth their time to see a business bankruptcy attorney, for businesses facing imminent closure due to heavy debt. It is a well known fact that more than half of new businesses fail during the first year of operation. With the recent economic decline, even older, once stable businesses that borrowed for expansion have found it harder to cover their loan obligations. It is important to hire an attorney who can look into all the available options and provide advice on what to do next, for business owners finding they’re facing such a dilemma.

Just as is the case with today’s mortgages, banks have found that foreclosing on businesses does not guarantee full recovery of their loans. The bad publicity that also accompanies such actions also discourages them from pursuing that option. Lending institutions have become increasingly willing to negotiate better terms with businesses. They can refinance businesses and extend repayment periods. This can help businesses access much needed funds for recovery and pay smaller, more manageable installments on their loans. It is a bad idea to engage an attorney who is experienced in handling such negotiations to obtain the best deal possible. A lawyer who has an established rapport with the banks in the field will know how to quickly work out such deals.

In the same vein as the previous paragraph…

The most important thing to remember is if you’re a guaranteed loan, then you’re 100 percent obligated to pay it back, meaning that you will need to prepare a financial plan if you foresee not able to pay off the loan. Try to draw up a plan that is based on financing and cost-savings options before speaking to a lender, such as factoring. If you have a firm that has accounts receivables, you’d be sitting on your next loan payment! Factoring is an option for to raise the cash flow of your company today. Also keep into account the fact that the bank will be obliged to sue if you do not eventually make payment arrangements to pay off the loan.

The Magic Business Bankruptcy Options?

Most lenders would prefer to follow a settlement or even renegotiate the loan. Keep your promises, and if you cannot, contact the bank early and ask them you’re in the process of looking into invoice factoring to vash in early on a number of your company’s invoices from customers for the loan payment. The last thing you wish to consider is bankruptcy to deal with your small business failure. So in place of this maneuver, consider accounts receivable factoring, because it just well may be the only means to save your business fairly quickly, and you can properly restructure your debt payments after you’re current.

Businesses can have their business bankruptcy attorney file for Chapter 7 bankruptcy. This option means that the company will come to a close. All non-protected assets are put up for sale. A court appointed trustee sees to the payment of creditors from the disposal proceeds. This bankruptcy is often opted especially where both the business owners and creditors are in agreement that future proceeds are unlikely to meet the outstanding debt over a reasonable time of time. Hiring an attorney ensures that the company owner will be properly advised on what property is exempt and ensure he/she fully discloses all relevant financial information to the court.

Another option is the Chapter 11 bankruptcy. This ruling allows business owners to carry on activities of the business without undue harassment for payment of debts from creditors. A trustee is appointed to help the business come up under a new repayment plan. This trustee ensures that he is the go between the debtor and creditor, and that the company owner is informed that he cannot sell off any assets. He will also monitor the business owner’s commitment to fulfill his payment obligations. A business bankruptcy attorney will play a decisive role in coming up with workable repayment plan and handling all related litigation work. Businesses that file for bankruptcy can find the process cumbersome and complex, and should hire a qualified lawyer to look after the technical issues.

Bankruptcy is often regarded as an embarrassing process. Even though it does leave one losing face, it is intended to help protect the business owner and the creditors’ interests. Failing to pay debts is an experience many successful entrepreneurs can attest to having gone thorough. It doesn’t mean an end to business establishment or growth. It is only a stumbling block that one must tackle and learn from. A good business bankruptcy attorney is the best person to help sort out complicated process of filing for bankruptcy and will guarantee the business owner’s interests have been properly looked after.

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