Filing for a business bankruptcy could be the jolt that your company needs to reestablish itself. Remember, major companies, such as Kodak, Delta Air Lines, General Motors, and many more, have succeeded after they filed for a business bankruptcy. However, even if you work with a bankruptcy attorney, a few missteps could nullify the benefits that you would have otherwise experienced from the business bankruptcy. By working closely with your Dallas bankruptcy attorney and avoiding these three common mistakes, you can ensure that you make the best decision for your business.
Avoid These Common Business Bankruptcy Blunders
Working with a bankruptcy attorney ensures that your organization will consider all the legal and financial aspects of a business bankruptcy. To ensure that your business bankruptcy succeeds, be sure to avoid making the following mistakes:
Selling assets to eliminate debt. If you’re an entrepreneur or sole proprietor, chances are that you’re a very pro-active person who likes to take initiative. While this is a strength, it can also be a stumbling block during a financial crisis. Unfortunately, many business owners will try to eliminate debt by selling their assets, thereby losing the very things that make their businesses valuable. Since assets are protected through a business bankruptcy, especially with the help of a bankruptcy attorney, you can keep the assets and still handle your debt crisis.
Making an inside transfer prior to bankruptcy. Before filing for a business bankruptcy, many owners will try to repay business associates and other colleagues. Though they believe this is the honest thing to do, this can also disrupt a bankruptcy filing, as this is known as an inside transfer. Be sure to consult with your bankruptcy attorney before making any transfers or attempting to make final repayments prior to filing.
Hiding pertinent information. Filing for a business bankruptcy is never easy. Many business owners tend to be embarrassed or shy about the debt, which can hurt the process as they work with a bankruptcy attorney. It’s crucial to remember that your bankruptcy attorney is an ally, so be sure to disclose all pertinent information.