Filing a Business Bankruptcy

A lot of businesses have been forced to close their doors for an indefinite period of time during the current health crisis.  Restrictions that have been put in place to protect the safety of the community are pushing owners to a tough decision…  can they keep going?


As I am self-employed, I know the efforts that go in to starting a business and the joys that come from running it.  But it’s a strict formula, when income gets drastically cut, but certain costs remain fixed (such as rent, insurance and equipment leases), it is often only a matter of time before the business is forced to close their doors.


Still, this is never an easy choice for the business owner who has put their passion and pride into running their business.  It is no easier than losing a family member.  Emotions run on overdrive.  So, when they come to me for advice, I put it in simple terms:  Make it a business decision.


Emotions can cause you to make poor decisions, such as pouring personal savings into a situation only to watch them go away.  I’ve seen it happen too many times.  Do your best to take the emotions out of it.  You made a business decision when you started your company.  Business decisions were made every day in the running of your company.  And if you are faced with a situation where your business has more bills than income, you will be better served to employ the same business sense when deciding if it is time to close the doors.


A business bankruptcy is an amazing tool.  When done correctly, it will shut down the corporation and protect the owner’s personal assets at the same time.  It also leaves the owner’s personal credit intact.  And while it closes the door on one chapter in their life, it paves the way for a fresh start when the business climate changes and the owner is ready to start again.


These times won’t last forever.  If your business is unable to operate in them, do what is necessary to protect yourself so that you are able to make a clean start in the future.

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