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.
When you're securing funding for your new business, it feels like you'll have no problem getting everything you need. You have a lot of interested investors. You started with a dream and no capital, so everything you bring in massively expands what you think is possible.
Chapter 13 bankruptcy is a very popular choice for individual debtors who do not qualify for Chapter 7 bankruptcy. Chapter 7 bankruptcy tends to be a very popular option since the entire process takes around six months, and debtors benefit from debt discharges. However, debtors will only qualify for Chapter 7 bankruptcy if their income is very low in comparison to their debts. Additionally, you will almost certainly lose your home as a result of filing for Chapter 7 bankruptcy.
When you are struggling with debts, it is important to realize that you need to take action in one way or another because otherwise your financial situation is simply not going to improve otherwise. One option that you may be considering in bankruptcy. However, many debtors feel overwhelmed with the different filing options that they have, and a paralyzed by the choices available to them.
If you are struggling with debt that feels uncontrollable, it can be difficult to see the light at the end of the tunnel. Feeling hopeless about your financial situation can lead you to become numb, opting to carry on spending regardless, rather than sitting down to create a plan of action. This attitude can only go on for a certain amount of time before you will be forced to face consequences.
When you are drowning under your debt, it is likely that you are fearful about many things. It might be that you are fearful about losing your car or home, or that you worry that your children might not be able to enjoy a good quality of life. With all of this fear, worries about taking action are also accompanied.
You are planning to declare bankruptcy. Perhaps you got in over your head in personal credit card debt. Maybe you have a lot of medical bills that you just cannot pay off. Maybe both. Whatever the reason, you know that bankruptcy is the best way to straighten out your personal finances.
Many things can lead to bankruptcy for a small business, from the introduction of new competition in the same space to a general downturn in the market because of outside influences. For instance, tourism-related businesses took a hit during the recession, not because they did not offer good products, but because other people did not have enough money to be tourists.