Dealing with a Looming Bankruptcy
The future is unpredictable and always susceptible to change. Thus the future can be daunting for any companies that are beginning to question their ability to pay off an overwhelming debt within a few years while running a successful business. Deciding what is best for a company that owes a substantial amount to creditors is a tough decision, and it is often unclear whether any decision made will still be benefiting the company a year later. While some business owners continue to carry the burden of debt, there are other options that can provide debt relief, such as bankruptcy.
Because the circumstances in which bankruptcy is considered can vary, there are several types that can prove beneficial to a business’s unique situation and aspirations for the unpredictable future. According to the website of Bradford Law Offices, PLLC, the first and most commonly preferred option is chapter 7 bankruptcy, which applies to either an individual or a whole business. Essentially, chapter 7, or “liquidation”, allows a company to sell some of its assets and then pay creditors. However, eligibility may make it difficult to proceed with that strategy. An alternative to chapter 7 is chapter 11 bankruptcy, which involves the reorganization of a company, sometimes with the help of a corporation or partnership, and the preparation of a debt repayment schedule. This way the business can continue to successfully move forward while paying off what they owe. Chapter 11 is similar to chapter 13, with the exception being that this tactic applies to individuals. Someone with regular income and crippling debt can develop a 3-5 year payment plan that enables them to continue living their lives without the suffocation of financial obligations that are out of their control.
For those companies and individuals that are unable to manage their debt, legal assistance can provide relief to those who suffer. There are many other options to consider, but among the few listed, it is clear that there is a good variety of choices that can appeal to most financial situations. By accurately assessing the situation and acting based on that observation, individuals may be able to recover some control over their futures.