What should you do when your business is failing?
Before filing for bankruptcy, read this!
Bankruptcy is something no business owner ever wants to consider. However, sometimes things happen that are out of your control. Sometimes the business just is not profitable. Sometimes you are simply in over your head and need relief.
Sometimes, bankruptcy is the right choice. However, it should never be a decision made lightly. It should only be undertaken after exhausting your other options.
When your business is short on cash, behind on its bills, and finding it difficult to even meet payroll, what should you do? It is always a good idea to consult with a business attorney to discuss your business’s unique concerns.
But, before filing the bankruptcy documents, there are some things to consider. Be sure you have tried everything reasonably possible to avoid going down the bankruptcy road. Some steps to take are:
- Talk to your commercial lenders. Your creditors do not want to see you file bankruptcy any more than you do. You may be able to negotiate a reduction of your debt and settle the amount you owe for less than your balance due.
You may want to engage the services of an experienced business attorney to help you with these negotiations. Often your attorney has experience with your particular creditors or with creditors in similar positions as your creditor, and therefore have a clear understanding of the creditor’s position.
- Cut your expenses. Is it possible for your business to operate on a leaner budget until the cash flow improves? Are there non-essential employees you could let go? Are there perks and luxuries that your business could forego for a period of time?
Depending on the size of your business, some employee’s roles could be combined. Or perhaps you have a business savvy receptionist who could take over payroll and bookkeeping rather than paying an expensive payroll services company to do the same thing.
- Consolidate your debt. Just like consumer loans, business loans may be eligible for consolidation at a lower interest rate. If you can lower your payments, maybe your business can survive the downward slide.
If your creditors are not eager to discuss consolidation, you may want to discuss your situation with an experienced business attorney. An attorney with experience negotiating debt consolidation and relief with creditors may be able to help negotiate an arrangement that you can live with and that will keep your business alive.
- Consider the cause of your business woes. If your business troubles are caused by something outside of your control, there could be relief available. A good business attorney could help you determine whether you are eligible for any grants or aid.
If your business has been negatively impacted by the pandemic, or natural disasters, or other qualifying events, you may be eligible for federal or state relief. A business attorney can help you obtain any relief your business may be due.
No business owner dreams of filing bankruptcy. However, sometimes it is the only and right thing to do. But, before you make that decision, make sure you have tried everything else.
An experienced business attorney can help you review your options and can even help you navigate the steps to keeping your business viable.
Some steps to consider include:
- Look at the cause of your business problems. There may be help available.
- Consolidate your debt. An experienced business attorney can help you navigate this step.
- Cut your expenses. You may be surprised how much this can help, even temporarily.
- Talk to your lenders. They do not want you to file bankruptcy either. An experienced business attorney can really help negotiate for you to reduce your payments and work out a reasonable payment plan.
Before filing for bankruptcy, talk to an experienced business attorney. Be sure you know all of your options.
Contact Our Coral Springs Business Law Attorney for More Information
Attorney Matthew Fornaro represents business owners and companies throughout Florida. Our legal team can help you with your startup, answer questions about employee matters, or assist you with business litigation. If you have a question about business law matters, we are here to help.
Call 954-324-3651 or contact us online to schedule an appointment or for more information about our business law services.