With all of the flurry about “credit crisis” and “ripple effect on small business,” some businesses may need to consider the option of bankruptcy if they can’t pay their debts in a timely fashion. Before you rush into that, however, realize that it’s a serious step that could leave a blot on your credit history for quite a few years (seven to 10, if not longer). You may be able to work out a better deal with your creditors by entering into a payment plan with them.
Attorney Robert Bovarnick has written a couple of articles outlining the banktupcy procedure and what you can expect from it:
About Chapter 7 (liquidation)
About Chapter 11 (reorganization)
In either event, make sure to speak to bankruptcy counsel first to get a full sense of your options.
This entry was posted on Tuesday, September 30th, 2008 at 8:56 am and is filed under Business Planning, Horror Stories, Legalese. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.3 Responses to “Considering Bankruptcy? Here Are a Few Things You Should Know . . .”
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October 7th, 2008 at 12:37 pm
Excellent point. Ironically, because of the current economic climate, you are in an excellent position to negotiate repayment plans with your creditors. It will be better for all of us if you can find a way to stay in business, employ people, pay taxes, and continue our free market.
October 7th, 2008 at 1:20 pm
Yes, especially as many creditors may only get 10 cents on the dollar in a bankruptcy if they’re lucky . . . late money is better than none.
May 18th, 2009 at 7:51 am
Hardly ever make comments on blogs but enjoyed spending some time reading yours. Thanks for all your work.