Bankruptcy should be the last option to save an ailing business and all the necessary steps should be taken in order to avoid the situation. In fact, only about ten percent of the companies that filed bankruptcy under chapter 11 ever recovered whereas chapter 7 is the most undesirable for any business as it is the total liquidation of the business. It also includes hiring a professional to deal with your bankruptcy case which is quite expensive.
In order to avoid such crucial situation some of the following steps are mentioned below.
- The very first step that should be employed in order to save your business requires some employees go. This is the most common practice for the companies to lay off their employees that is facing bankruptcy.
- Restructuring of the debts is also very important and if done consciously, it may result into avoiding the critical situation. The process of restructure enables the debtor firms to return back to positive cash flow.
- Hiring a turnaround management professional is also a very good idea. This would be one of the most professional means of finding the failures and determining the loopholes of the system set up by you. One can also find a specialist from the Association of Certified Turnaround Professionals and try to find solution for the crisis.
- You have to understand what kind of personal liabilities you are having towards your business debts and have to work accordingly.
