What is corporate bankruptcy?
If your business fails and you are unable to pay your debts a licensed insolvency trustee will take your assets and sell or use them to pay off your creditors. You surrender everything you own to a trustee in exchange for the elimination of your debts, and you get a chance to start over. Keep in mind that your credit report will be affected, making it harder to get a loan in the future, and you are required to perform certain duties, like reporting your income to your trustee every month.
Should You File for Bankruptcy?
When a small business becomes buried in debt, bankruptcy is the most commonly known solution. However, other times there are better solutions such as Corporate restructuring and or Corporate proposals.
Does Your Business Have Assets?
If your business has more assets than liabilities, then it may be worth saving or selling. If the liabilities are greater than the assets it may be time to close.
Are you personally liable for the debts?
Bankrupting the company only deals with the company’s liability to pay the debts. If you have personally guaranteed the debts then you need to consider your options very carefully and consider negotiating with creditors if the business cash flow can maintain new payment terms.
Closing down or bankrupting the business will leave creditors with no other option but to go after you personally for the debts you have guaranteed. We suggest you contact us at Murphy & Associates when making any decisions.
We Provide Corporate Bankruptcy Solutions. Let us help you! Any Questions?
Or call Murphy & Associates at 604-584-2121