Importance Of Filing For Bankruptcy
When you have any business, you will always have to get money for investing by taking loans from different lenders to facilitate the different processes that are necessary to keep that business on its feet with the chance of repaying them from the profits made by the business. However, with the different market conditions, it is possible that you might fail to repay the loans especially if the business starts to experience shortcomings that result in heavy losses which threaten to put a halt to the operations of the company.
You can choose to file for bankruptcy when you get to the point where you have a lot of outstanding loans that your business cannot pay, and you want to give yourself some space from the creditors who are always asking for their cash so that you develop a repayment plan. Make sure that you get in touch with your bankruptcy attorney who can go to court and file for bankruptcy with the intention of stopping any lenders from harassing you to the extent of auctioning any of your properties because they want to get their money back from the cash made.
Filing for bankruptcy has a downside in the sense that the credit score of your firm is more ruined and you will therefore locked out from taking other loans you might need since creditors will be wary of you due to your loan repayment history. Another provision is that your company will be obligated to present the tax income details of every financial period to make sure that your capacity to begin the loan repayment procedure is determined.
There are many benefits that are associated to filing for bankruptcy in case you have a company that cannot settle loans. The first benefit is that there is the possibility of loan elimination whereby some of the old loans that you owed can be scrapped off to give you the opportunity of starting afresh so that you focus on rebuilding the company instead of attempting to pay the previous old loans.
The second importance is that the accepted bankruptcy application shields you from the activities of your creditors who want their money back because they are forbidden from auctioning any of your properties to get their money back according to the lending agreement you had earlier. Lastly, filing for bankruptcy ensures that there is an end to any wage garnishment plans that force you to withhold a certain percentage of your employees salaries so that they can be used to pay the loans because they create a problem of employee protects that can paralyze the operations of the company.