Entrepreneurs in Ohio who established small businesses with great intentions and high hopes of success will naturally be devastated if financial difficulties become overwhelming. While their first inclination may be to file for bankruptcy to eliminate business debt, it may be best to first consider other available options. Important decisions are always better made once all the relative information is available and the pros and cons of each choice are carefully evaluated.
Although bankruptcy can be the ideal remedy for some, the long-term consequences may be avoided by taking proactive steps. These may include negotiations with creditors. Offering the business owner better payment terms will ultimately benefit creditors who may lose more if bankruptcy is filed. Another vital step to take is to scrutinize every single purchase made by the business to identify areas that are leaking money. By purchasing only essentials and being frugal, entrepreneurs may be surprised by the positive results that may even prevent bankruptcy.
Small business owners can also consider selling assets, including property, to avoid having to file for bankruptcy. By assessing all assets and evaluating the importance of each to the success of the business, some may be identified as assets that can be liquidated to fend off bankruptcy. These precautions may be more effective than taking out high-interest loans or accepting financial help from friends and family. While some families run successful businesses together, borrowing money from them may be unwise.
Even while taking these steps to overcome the threat of bankruptcy due to business debt, it may be beneficial to gain knowledge about small business bankruptcy options. An experienced Ohio bankruptcy attorney can explain the different bankruptcy chapters and provide business advice that is based on the unique situation of the client. Bankruptcy helps businesses or individuals to reorganize the payments of their debts, or have assets liquidated to cover debts, and a seasoned lawyer will suggest such a filing when it is the most suitable option.
Source: FindLaw, “3 Tips to Avoid Small Business Bankruptcy“, Ephrat Livni, Accessed on Oct. 28, 2016