Before You Consult With An Attorney To Discuss Bankruptcy

Before You Consult With An Attorney To Discuss Bankruptcy

When times get really tough:

The number of bankruptcies has increased dramatically over the past decade, there still is a stigma attached to it that makes future dealings with lenders, and creditors difficult at best.

The day may come when cash flow becomes an issue that precipitates a business filing for bankruptcy, bad things do happen to good people, including honest and even successful companies and departments that have spun momentarily out of orbit – it could even happen to you.

But before entrepreneurs start to jump ships, and call it quit, hand themselves to the authority or even hit flight-mode – they should ask themselves the following five questions:

1.      Have I done any best in negotiating with creditors and suppliers to become partners in helping me out of this crisis? Do they understand the severity of my situation? Have I done honest with them in terms of cash availability and payment terms?

2.      Have I done my best to collect all current and past due accounts receivable? Have I been honest with them and offered incentives for prompt payment?

3.      Have I considered alternative finances, including short-term bank loans, extended credit and other revenue sources to free up funds?

4.      Have I cut loose from non-crucial creditors, paying them just enough to remain legally viable?

5.      Have I reduced all unprofitable sides or lines of mu business that may have been draining cash and other resources from the organization?

Once business owners or entrepreneurs have answered these questions, they should be able to come back from their hidden place, forget about skipping the country and the situation will even seem a little less desperate – however, if things still seem hopeless then its time you probably consult with an attorney. 

The world of business is a constantly changing scenario, if we’re not aware of the way these changes affect our businesses and our cash flow – then we shouldn’t be in business after all.

Better to get a handle on cash flow early and work through challenges while they still are small, the opportunities a company ends up with will far outweigh the challenges it faces during tough times. 

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