Businesses can suffer from the accumulation of debts relatively quickly. This is primarily because many external factors can affect a business' success. Even if a few months ago your cash flow was healthy, you may have fallen into debt fairly swiftly due to a situation that was beyond your control.
Even if the reason why you fell into debt initially was through no fault of your own, it is your responsibility to take control of your finances. You should, therefore, make sure that you look into your various options regarding bankruptcy so that you can effectively remedy the situation. The following are three options that you have as a business owner.
File for Chapter 7 bankruptcy
If your business does not have a high amount of assets and you are not earning a high income, filing for Chapter 7 bankruptcy could be the best option for you. This is because this Chapter 7 bankruptcy involves the liquidation of assets followed by a debt discharge.
File for Chapter 11 bankruptcy
Chapter 11 bankruptcy essentially offers business owners a second chance at success. By reorganizing their business and creating a restructuring of debts, they will be able to manage debts while maximizing profit.
File for Chapter 13 bankruptcy
If your business is a sole proprietorship, you will have the option to engage in personal bankruptcy through a Chapter 13 filing. This helps you to create a realistic repayment plan.
If you are struggling financially as the owner of a business, it is important that you do not delay taking action to tackle your debts through bankruptcy.