Commercial bankruptcy and its alternatives
When we are crushed under the weight of our debts, it’s hard to see the light at the end of the tunnel and consider anything else but a commercial bankruptcy. However, there are a few considerable solutions you should be aware of before starting to file for bankruptcy.
Even if bankruptcy is unavoidable and advantageous in certain situations, when you declare a commercial bankruptcy, it means that you lose all chances to let your business recover. A commercial bankruptcy is final. If you wish to pursue your activities, there might be another solution for you.
N.Séguin Inc. offers you a little and easy to understand guide to commercial bankruptcy in hopes of helping you find the solution that will answer to all your needs.
Establish your needs
Even before considering a commercial bankruptcy or any other alternative, think thoroughly about what you need. Do you wish to pursue your business’ activities despite the obstacles or do you wish to clear your debts as fast as possible?
There is definitely a solution that will go in the same direction of your needs. You only need to know them to get on the right path.
Build a recovery plan
Maybe you overestimate the number of debts you have; an indebted business is not necessarily a sign that you need to give up and declare bankruptcy!
Is my business model efficient? Maybe you should consult a professional to help you answer the previous question. If your debts can be cleared by a new business plan, maybe a recovery plan is the solution for you.
A plan will help you discover the strengths and weaknesses of your business, the market analysis, and your competitors, as well as help your business recover through the implementation of recovery measures.
All is not lost! Before you conclude with a bankruptcy, make sure there is no possible way of recovering your business first.
Make a business proposal
In a situation where the amount of debt is impossible to clear with a recovery plan, there is always the possibility of turning toward a business proposal.
What’s a business proposal? It’s an agreement the trustee takes with your creditors that will allow you to pursue your business’ activities while extending the payment deadlines. A business proposal is a good alternative to commercial bankruptcy because it readjusts the amount of your payment while considering your business capacity to meet its obligations.
This solution is as advantageous for you as it is for your creditors since they’ll be receiving a greater amount than they would if you had chosen commercial bankruptcy.
Finally, the commercial bankruptcy
If you find yourself in a situation where commercial bankruptcy is your only option, rest assured. It is sometimes the best and only solution available to avoid an increase in debts.
A commercial bankruptcy is a legal process that means a complete shut-down of your business and its activities while allowing you to free yourself of debts by liquidating the totality of its assets.
Here are the steps to declare bankruptcy:
- Meeting with the trustee
- Filling the required documents for bankruptcy
After these two steps are done, the trustee takes care of the following steps:
- Filing the previously filled documents
- Registering the bankruptcy
- Seizing of your property
- Taking inventory of your assets
- The sale of your assets
- Administering of your file
- Closing your file
- Application for release from the court
If you have any other questions about commercial bankruptcy, do not hesitate to contact N.Séguin Inc. credit counselors. A member of our team will gladly answer all of your questions.