If your business is heavily-laden with debts and creditors are calling day and night, it might be time for you to think about filing for bankruptcy. Bankruptcy is a legal process that provides a leeway for you to manage your debts when your finances are on the rocks. Bankruptcy lawyers can help you with this, starting from consultation to litigation and evaluation of debt. And although many business owners dislike filing for bankruptcy, it could be very helpful to you in a number of ways. Read all about them below.
Halting of debt payments
When you decide to file for bankruptcy, your lawyers will notify all the creditors about the filing. A bankruptcy filing automatically demands a stay (halting) of all debt repayments. This means that you will be in a position to pause all your payments, be it rent, mortgage, and debt owed to banks, other lenders, suppliers etc. Creditors and debt collectors will also have to halt their requests for payment. This will give you some relief as you cannot be auctioned off or have your property seized/repossessed.
Get time to reorganize your finances
Once the debt repayments have been halted and your lawyers have filed for bankruptcy under Chapter 7 or 13, you will be allowed time by the court to reorganize your finances. Chapter 13 bankruptcy can provide you with 3-5 years of time to repay your debts. This will give you sufficient time to get your business back on track, and to re-accrue business capital. By the time that duration is over, you will most likely have repaid your debt and restored your business’ profitability.
Discharge of debts
If your lawyers file for bankruptcy under Chapter 7, you may enjoy a discharge of your debts. Discharge here means that your debts will be written off completely. Of course, this will only be done once the court is convinced that you have done everything possible to pay and no longer have the means to do so. Needless to say, a discharge of debts will allow you to get your business back into profitability much faster because you will not have to give away a big chunk of your revenue away each month. More information brand name: Houston Bankruptcy Lawyer
Re-adjustment of debt payments
Under chapter 13 of bankruptcy, the court will mandate your creditors to re-adjust your repayment terms to allow a more flexible plan. Basically, this means that your debts will be stretched over a longer period. This will reduce your monthly payments to smaller sums that won’t tie your business down. You and your bankruptcy lawyer will be involved in this process and the terms agreed to will be much to your favour.
Debt and money management lessons
And last but not least, filing for bankruptcy will teach you vital lessons about debt and money management. As the saying goes, ‘every dark cloud has a silver lining’. Even though bankruptcy is a bad experience, some good will come of it. The experience will teach you life-long lessons that will hopefully make you a smarter business owner in the future.
If you are thinking about filing for bankruptcy, check out https://weberlaw.com/attorney/. They are a reputed bankruptcy law firm based in Houston.