Having your own company and running it the way you want to run it has its own benefits. The most obvious of these benefits is that you get to be your own boss and you get to create whatever income it is that you desire, with only your imagination, your creativity and your willingness to work hard as the limit.
However, it takes money to raise capital to start a business, and it takes money to keep it running. Sometimes, huge amounts of money are involved just to keep the company afloat. And sometimes, when the boat is sinking, you have no other choice but to look for ways to stop the sinking and to keep the boat floating. The stopper often comes in the form of bank loans and suspension of payment with some of your suppliers and contractors. Such actions put your company in debt.
But getting into debt has its own dangers. More often than not, when the company is far too deep into debt, it becomes more and more difficult to get out of it. When no relief from debt can be seen in the horizon, what a company usually does is to go for the inevitable, and that is to file for bankruptcy.
Bankruptcy may be a relief, but it can hurt far more than you think. Filing for Chapter 11 protection may take some of the burden of your company’s debt off your shoulders, but it is very damaging in the long run. Your reputation as a money manager is compromised, and so is your creditability. Should you have the need to take out another loan or to ask for credit, your potential creditor will only need to glance at your record to see that you have once filed for Chapter 11 protection. After looking at your records, your creditor would either deny your request for a loan, or would grant it to you at a much higher interest rate.
Filing for bankruptcy should only be the last resort, to be taken only when there is no other route to be taken to save your company from mounting debt. Instead of filing for bankruptcy, you should consider hiring the services of a debt settlement agency that will handle the financial obligations of your company.
There are many ways that a debt settlement agency handles the financial problems of its clients. The process, however, usually involves a two-part program. The first part would have a representative of the debt settlement agency contacting all your company’s creditors on your behalf to see if he or she could arrange for a restructuring of your company debt. Restructuring your company’s debt is almost a guarantee that you will be paying off your company debt through manageable installments.
The second part is that the representative of the debt settlement agency would be looking at all the financial records and documents of your company in order to catch whatever mistakes are being made in the handling of your company’s finances. Based on the information given to this representative, he or she will formulate and recommend plans that will keep your company’s cash flow running smoothly.
It is sometimes hard for a businessman to cooperate with a debt settlement agency in handling his affairs. However, if the businessman really wants to get his company out of debt, he should cooperate with the debt settlement agency as best as he or she can.
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James Banks is a contributing writer to http://www.commercialdebtcounseling.com and is currently writing some special articles to guide business owners on how to manage debt and avoid bankruptcy. For Free Information on Business Debt and Debt Help Consultation, call toll-free 1-877-324-1218.