Business bankruptcy state if filed in court can lead to a situation where you can loose your business completely and thus destroying the chances of recovery. The disadvantages of filing business bankruptcy therefore are many and some are enumerated below:
- If you file bankruptcy in court, you will have to hire attorney to present your case but as you are aware that attorney fees is not nominal and you shall have shelve down heavy fees. The litigation costs are very expensive and time consuming. Therefore, don't expect decision or relief in court.
- After filing the case, the court has control over your assets as such you loose the control on your business and therefore improving your business does not arise. Even Mortgage after bankruptcy will also not bring any relief under the situation on account higher interest rates are being normally charged in such cases.
- Despite filing bankruptcy case, you have to pay for your pending taxes as such you wont get any relief on your backlog taxes.
- Even chapter 11 cannot provide you much relief with little cash and lot of liabilities you can not run your business profitably.
In personnel bankruptcy there is quite a possibility that you may get some relief under chapter7, but in business bankruptcy the only option is under chapter11. the chapter 7cant provide any hope as your business assets will be confiscated by court and sold to arrange payment to lenders.
It is advisable under such condition to avoid filing bankruptcy, prevent the expanses of litigation instead restructure your business debts in consultation with your debtors to arrive at a mutually agreed formula to attend in developing your business more vigorously under proper counseling from experts in the field and discover a plausible solution. You will have to devise as such a repayment plan mutually agreed upon by both you and lender. And he may agree on lower monthly installments, which shall prove a helping hand in such a situation. This way you may not only get out of debt but return to profitability.
It is therefore advisable to find alternative to business bankruptcy if you really want save your business. Thousands of business houses are facing financial trouble and try finding refuge under bankruptcy laws with the hope they can start a fresh but unfortunately it never happens-thus they face closure of business. In fact large numbers of companies who seek protection under bankruptcy law have additional funds to deal with litigation and other financial requirements arising by filing the case.
Debtips is the most comprehensive resource on Debt Consolidation Loan, Bankruptcy, Mortgage, Credit and Payday Loans. It is just the right channel to make you finance literate and also helps in managing your personal finances. Visit Debtips and find all the information on
Bankruptcy is an unfortunate situation and can happen even to seasoned businessman or to a new entrepreneur. Avoiding Bankruptcy is the best strategic plan one can adopt. Go ahead to know intricacies of Business Bankruptcy and the ways to deal with it.