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The Bankruptcy Process, When You’re A Business Owner
Most small businesses will not survive the first 5 years.
But as the lockdown has been so harsh for many small business owners, the usual 70-80% rate, might increase over the next year or so.
If you’re not planning for the worst you could be for a massive shock, if and or when the time comes for you to file bankruptcy. It’s not an easy process to go through mentally.
It’s very challenging and it can seriously bury a hatchet into your heart.
Having to say goodbye to business, something you created out of thin air, is so tough. But we have to pick up the pieces and move on so we can grow.
The first step to healing is going through bankruptcy properly.
How it works
Every nation has its own way of doing things. In America, you’d file for chapter 13 and go from there.
In other nations like Canada, the rules are different. Unlike what you could be in another country, many times the business assets are not separate from the owner.
If your business is set up as a sole proprietorship or partnership, it will be seen as a personal bankruptcy.
This means that cars, delivery trucks, offices, desks, and warehouses, etc, will all be included in the process.
They will be counted as viable collateral of the owner’s assets. If you are a limited liability company, this is something you won’t have to worry about as it’s pretty much treated the same around the world.
Stating the reasons
For the creditor who is tasked with undertaking the bankruptcy, it will need to state the reasons that caused it.
This in turn means you need to cite what those reasons sare. It’s something you have to do to satisfy your creditor but also the authorities who will need to take your business of government registries and listings.
It’s also a good idea to get your reasons out first before speculation drives the narrative toward false avenues, in the media. Always use documents to back up your claims.
If your investment didn’t work out, documents should prove this. If you were unable to make the sales you needed to stay afloat, a sales report and margin figures must also be presented. Speak with an insolvency lawyer who will help you form a file of all the evidence you need.
The Bankruptcy Process: what are your options?
Speaking with a licensed insolvency trustee who can give you educated bankruptcy help, is a great way to fuel your recovery.
They will formulate a plan with you, on how to make payments to satisfy irate creditors.
They will also help you decide which assets can be sold and which assets you can keep while making a payment plan for them separately.
There are so many options you have to make bankruptcy easier so you can get back on your feet quicker. Trustees very often work with governments so you may not have to pay any fees at all.
In some nations, bankruptcy is easier because you have free authoritative advice on hand to help you. An insolvency trustee is a great way to learn the best options.