Whether you are an individual or a business, filing for bankruptcy is never as straightforward as you may hope. Now, that shouldn’t discourage you from filing if you really need the protection that bankruptcy offers. But it is meant to make you think. There are a lot of questions you need to ask yourself if you are running a business before you file for bankruptcy.
Think about whether the filing is necessary and, if so, consider getting an attorney as soon as possible. Sometimes you can negotiate a compromise with your creditors which will allow you to continue operating as a business without having bankruptcy looming over your head. No matter what you decide you should always have an attorney on your side.
Once you decide whether you can operate during the bankruptcy, it is crucial to decide what type of bankruptcy you will file. Making this decision is crucial, and you will have to weigh the financial costs associated with the process.
Then you need to consider a possible reorganization of the company, which bankruptcy can allow. Just because you file for bankruptcy doesn’t mean that your business is gone for good. Also, you need to know if any of the debts you have are guaranteed by you or the business.
Last but not least, you will need to talk with your attorney about how you plan to proceed in court (if you want to expose the company in that way), and how you will deal with the restrictions that come with operating a business under bankruptcy.
Source: FindLaw, “Ten Things to Think About Before Filing for Bankruptcy,” Accessed May 10, 2016
