Among the main causes of bankruptcy are excessive borrowing and unexpected medical expenses that can choke the finances of anyone. There comes a time when accounts payable becomes unmanageable leading many businesses to consider filing for bankruptcy. Business Bankruptcy can eliminate some but not all debts and avoid collection calls and efforts. It sounds easy and beneficial, but you should consider the consequences that can affect you long-term.
Only by understanding the process can you really determine if bankruptcy can help your business. Here are some pros and cons that may help you make the right decision for every situation.
The bankruptcy laws were designed to help people who have incurred debt in good faith, or with the intention to pay, but because certain circumstances arose you are unable to pay. Given this, Business Bankruptcy can help you:
1. Stopping or delay court proceedings, business eviction or judicial auction.
2. Avoid or delay the seizure of your wages or property.
3. When you declare bankruptcy, your creditors cannot contact you or take judgment, or seize your property, including your salary.
4. Company bankruptcy eliminates debt like credit cards, past rent, personal loans taken out for the business, and so on. However, there are debts that cannot be eliminated such as student loans, alimony and child support, physical injury to others by driving under the influence of alcohol or drugs, debts for fraud, financial obligations as part of a criminal conviction, outstanding taxes in the last three years. This last thing is the same with personal bankruptcy.
One of the major disadvantages of filing for bankruptcy is that you incur additional expenses, especially if you use the services of a lawyer, like fees and rates, in addition to the required credit counseling courses you may have to take. Every bankruptcy is part of a public record, which means that everyone has access to this information and will know your amount of debt and who your creditors are. Your credit score will be affected negatively, and this in turn can reduce your chances of opening up another business or even getting hired elsewhere. If you have given goods or money to your relatives or friends in the past year, they may be forced to return it. Finally, bankruptcy can remain on your credit report for up to 10 years. Contact Chicago Debt Solutions and see how they can help you. You can like them on Facebook.