Knowing When to File for Bankruptcy as a Small Business

 

Small businesses are the backbone of the economy, with over 30 million small businesses operating in the United States. Unfortunately, it’s not uncommon for these businesses to face financial difficulties. In times like this, it may be a good idea to start considering bankruptcy. Though it’s often seen as the last resort, there are times when it can be a strategic move for a small business. In this blog from experts in bankruptcy assistance, you’ll find tips to help you understand when it’s time to think about filing for bankruptcy as a small business.

Unable to Pay Debts

One of the most significant signs for a small business when it comes to knowing if you should file for bankruptcy is being unable to pay its debts. When a business has more debts than assets, it is often difficult to stay up to date with necessary payments. This results in late fees and an accumulation of debt over time. Financial difficulties like this can be alleviated through bankruptcy.

Can’t Negotiate with Creditors

As a struggling business, it’s likely that you’ve tried negotiating with creditors to extend payment terms. If none are forthcoming, then filing for bankruptcy could be the best way to move forward. Bankruptcy gives you the opportunity to discharge some of those debts and negotiate a repayment plan for the remaining ones.

Legal Action Against Your Business

When facing legal action from creditors, including collectors taking legal action against your assets, it’s time to consider filing for bankruptcy. It allows you to keep most of your assets and halts creditors' efforts. This will give you some more time to regroup, reassess your options, and decide on the best way to move forward.

Conclusion

Bankruptcy is not a simple decision to make for any small business. It’s a stressful situation, and you may be worried about your financial future, and the future of your business. Remember to review all your options and consider what is best for your circumstances. Don’t try to figure it out on your own; make sure you work with a professional to guide you through any financial challenges. If you need assistance with bankruptcy or want a free debt consolidation consultation, reach out to Lewis & Jurnovoy today.

 

Lewis and Jurnovoy is a local law office serving the Florida Panhandle. We specialize in bankruptcy law, including Chapter 7 and Chapter 13 bankruptcy. We will work to achieve the best financial remedy for your outstanding debts.

Lewis & Jurnovoy PCB
2714 West 15th St
Panama City, FL 32401
(850) 913-9110
https://www.LewisandJurnovoy.com