Your business is experiencing difficulties and you want to find out how to know if a business is bankrupt? Asking yourself the question is already a sign that something is wrong. Fortunately, that doesn’t mean you have to declare commercial bankruptcy. Even if you are having difficulty, there may be other options to manage your financial problems.
But how do you know if a business is bankrupt? There are several unmistakable signs. Is your business burdened with debt? Are your business revenues lower than your expenses? Do you receive several calls from dissatisfied creditors and suppliers? These signs could indicate you are on the road to bankruptcy. However, they are not absolute, don’t despair so easily. There are many possible solutions before having to take steps to declare commercial bankruptcy in Quebec.
Our experienced financial advisers have decided to draw up this practical guide. We are happy to help you find out how to find out if a business is bankrupt. Also explore the options available to determine the ideal solution for your situation.
How to know if a business is bankrupt: the options before declaring bankruptcy
Before discovering how to find out if a business is bankrupt, it’s good to determine your business needs. If you’re drowning in debt, it can be difficult to see the light at the end of the tunnel. However, the choice remains yours. If you can continue your business activities in spite of your financial situation, there are solutions to help you settle your debts as quickly as possible.
Discover the solutions available to rectify your financial situation and regain control of your business.
Consult an expert to build a solid financial recovery plan
To discover how to know if a business is bankrupt, we usually look at the amount of debt. Warning ! When you are in debt, you sometimes overestimate the amount of debt. A leveraged business does not necessarily indicate that you have to declare bankruptcy or give up. Sometimes it’s just a matter of adjusting your aim. Don’t hesitate to consult experienced financial advisers to help you build a financial recovery plan.
Sometimes it’s enough to just modify your business model to make it more effective. The advantage of a financial recovery plan is that it helps you:
- Discover the strengths and weaknesses of your business;
- Analyze your market and your competition;
- Find turnaround solutions tailored to your business needs
Of course, not all debt problems can be resolved with a debt relief plan. If this is your case, you could still use the debt restructuring proposal instead of commercial bankruptcy.
How to know if a company is bankrupt: the debt restructuring proposal
The debt restructuring proposal is an agreement an authorized trustee makes with your creditors. This way you can continue your business activities and get an extended repayment term. It also puts an end to harassment from your creditors and all legal or foreclosure proceedings. It’s a great alternative to bankruptcy because it allows you to readjust your payment amount according to what your business is able to afford. So you can avoid bankruptcy and pay off your debts.
In addition, this solution is as advantageous for you as for your creditors, because they will ultimately receive a higher amount than they would have reaped with bankruptcy.
How to know if a business is bankrupt: how to declare a commercial bankruptcy in Quebec
Unfortunately, your business may have no other options than declaring bankruptcy. Bankruptcy remains one of the best solutions to permanently get rid of your debts.
Since commercial bankruptcy is a legal cessation process, there are many steps to follow. You will first need to hire a licensed insolvency trustee to help you manage your commercial bankruptcy.
First, you will need to:
- Meet the trustee;
- Complete all the documents required to declare bankruptcy;
Then, the trustee takes over by:
- Depositing the previously completed documents;
- Registering the bankruptcy;
- Organizing taking the possession of your property;
- Establishing the inventory of your assets;
- Selling your assets;
- Administering your file;
- Closing your file;
- Applying to the court for release;
Have you discovered how to know if a business is bankrupt? If you have financial or bankruptcy questions, contact us. An experienced financial advisor from our team will be happy to take your call.