Bankruptcy is a dreaded word by not just business owners, but families as well. It is not something that people want to go through, but it is the reality for many. With a business, sometimes you can put in all the hard work in the world but still end up filing for bankruptcy.
When starting a business, 30% will fail during the first two years. That number increases to 50% in the first five years, and 66% in the first 10 years. Only 25% will actually make it to at least 15 years.
With these stark statistics, there’s a likely chance that a new business may end up filing for bankruptcy. If that is the case, can your business survive, and if it does, can you get it back on track?
Getting the top bankruptcy attorneys in Scottsdale is one step to take. After that, consider some of the following points to help you get your business back on track.
Determine Which Type of Bankruptcy You’re Filing For
Depending on which bankruptcy you end up choosing to file, whether it be Chapter 7, Chapter 13, or Chapter 11, the case will significantly impact the outcome for your business.
For Chapter 7, your entire business is liquidated and sold off. You would then have to start over from scratch. In contrast, Chapter 13 bankruptcy will affect your company, but you will still have the debt to deal with. With Chapter 11 though, your business will continue to operate daily as your case pushes through the bankruptcy process and a reorganization plan is approved.
Understand What Went Wrong
One of the most important things to focus on after going through the bankruptcy process is to determine what went wrong. One of failure’s benefits is that it’s an opportunity to learn and grow. Take a look at your prior business plan and make essential notes of which parts went wrong that caused you to go into bankruptcy.
Build Your Credit Back Up
One of the hardest things about bankruptcy is that your credit score takes a significant hit. That number is essential if you need to file for a loan to start your business back up again.
Work towards building your credit back up. Start by paying all of your bills and credit cards on time. The more diligent you are about any remaining debt and paying it off, the more favorable outcome it will have on your credit score.
Find Another Source of Revenue
If your business can continue while you are going through bankruptcy, find additional ways to bring in more money. The reason you went into bankruptcy is that you lacked money. So, if you can find other ways to increase your monthly revenue, you’ll have more money to put towards your debt and to keep your business running.
Don’t look at bankruptcy as the end of an era. Instead, consider it as a second act— the new chance to get your company back up and running smoothly once more. It will take a lot of hard work and dedication, but a business can survive and thrive after filing for bankruptcy.