Bankruptcy is a legal process which allows individuals, couples and businesses that cannot meet their financial obligations to be excused from repaying some or all of their debt. An experienced bankruptcy attorney can facilitate you in your financial management through filing bankruptcy depending upon your situation. The existence of bankruptcy goes back to ancient times. In the USA the rules and procedures for filing bankruptcy are governed by the USA Federal law. States are prohibited from legislating in this area of law, as the federal law will sustain.
There are two main types of bankruptcy in the USA, which is chapter 7 and chapter 13. Chapter 7 bankruptcy deals with the liquidation of the assets. This means all the assets of the debtors are liquidated and the outstanding debts will be paid off from that amount. While on the other hand, chapter 13 bankruptcy deals with the reorganization of the debt plan. In this bankruptcy, the debtor can maintain all his assets by rescheduling the debt payment plan as per the current income. Or, by increasing the timeframe for the debt repayment. Both ways the debtor can save his/her assets and keep on going the business concern.
Filing for bankruptcy on your own is a risky task, as there is a likely possibility that the debtor may not be able to comprehend the legal intricacies of filing bankruptcy, and may end up in the worst situation. Therefore, it is important to have an experienced bankruptcy lawyer by your side, who can help you and your family in the time of need.
Not everyone can avail the option of bankruptcy. For instance, those debtors who have had their debts discharged under Chapter 7 within the past eight years cannot re-file for bankruptcy. Speaking of Chapter 13, the waiting time frame is six years. Too much disposable income is also a problem if you are going for bankruptcy. Debtors who make enough money to repay their creditors are barred from filing a liquidation bankruptcy. However, reorganization or restructuring of the debt payment might be a likely option for the debtors.
Businesses that are insolvent, but want to keep their business going can go for Chapter 11 bankruptcy. This means, personal reorganization of the debt repayment plan. Chapter 11 bankruptcy allows businesses to obtain protection from their creditors, while they put together a new repayment plan, as per the new income.
Irrespective of the bankruptcy chapter 7, 11, or 13- a debtor has to comply with a vast number of Federal laws and regulations. An error at any point can result in the court refusing to discharge the debtor’s liabilities. When the bankruptcy process ended up that way, the consequences are disastrous for the debtor. With so much financial and a time value of money at stake, hiring a licensed bankruptcy attorney at the outset is a wise investment. As the attorney not only guides you throughout the process but also help you and your family in getting out of the situation.
7 Signs Your Business Face Financial Trouble
Within the last few decades, many companies, from high-profile mainstays to small local businesses, have fallen by the wayside. While some of those closures, administrations, and liquidations come seemingly out of the blue, there are somewhere in actuality the warning signs for the business were there before the final nail was driven in.
Listed below are seven key signs your business is in financial trouble.
Your Cash Flow Is Imbalanced
As the word goes, running a business, “cash is king.” An easy cash flow, where enough arrives to cover your outgoings, is key to keeping your organization operating. However, this flow could be sensitive, especially in small businesses. A supplier or customer perhaps not spending punctually may impact your cash flow, as may premature expansion or overspending in times wherever in actuality the going is good.
Negative cash flow is appropriate in the temporary while a fledgling company sees its legs or in the aftermath of an important expansion. But without positive cash flow, in the future, a small business cannot pay its costs and thus cannot survive. If your fund office is postponing spending its costs or team, it may indicate imbalanced cash flow.
Creditor Pressure Is Growing
The best way to help keep your creditors happy and minimize the pressure on your own company’s shoulders is to cover them on time. If your outgoings outnumber your income, it’s tempting to delay spending invoices. But doing this is just a sure-fire treatment for sour relationships along with your creditors, who may start chasing you for payment.
This may start the slippery slope into further trouble, as they’re likely to carry on chasing you until your debts are paid off. Creditors could even resort to legal action in an endeavor to retrieve their money, and you might wind up facing bailiff action.
You’re Always Refinancing
Refinancing alone isn’t an indication of financial trouble; it is a legitimate way of freeing up cash tied up in company assets by borrowing money secured against an assets’value. It can be used to lessen rates. While refinancing once isn’t abnormal, the business must manage to afford the repayments. If it occurs usually, it could be a sign of higher financial problems, and lenders may become cautious of companies continually refinancing, which may lead to more economic troubles later.
Until you are the main trader, staff are one of the very most vital the different parts of your organization, and employee morale often correlates along with your company’s health. One of the very obvious signs of financial trouble linked to staffing is layoffs and cutbacks in employee benefits, bonuses, or even a pay freeze.
The business could also change its contracts with staff, reduce hours, introduce zero-hour contracts or make staff work more for the same money. Doing so risks souring relationships along with your personnel and could cause to another location point.
Bad Company Atmosphere
Reducing advantages while increasing objectives on personnel will likely result in a bad environment and a drop in work satisfaction. Work can become less of a place of work and more of a place for fighting fires, constantly coping with problems instead of being productive. Team may lock onto that downturn and modify the atmosphere and start causing higher figures, too, taking people back to the last position about staffing issues.
Counting on Individual Contracts or Projects to ‘Sort It Out.’
Whenever a small business is operating healthily, it will have many clients or customers on the books with consistent income. Businesses in a less healthy position might put more weight on the agreements they do have. If one improvements company or stops being fully a regular source of business, the consequences will have an even more detrimental impact.
You could notice the company is relying more on fewer clients or focusing all of its efforts on acquiring new ones to the detriment of those they already have. This could sour relationships with existing customers and be described as a sign the directors are desperate for income.
Your Customers Have Noticed
Clients are very good at spotting when things change, and if they feel they’re getting less while paying the same money, they’re unlikely to stay quiet. If your employees are unhappy, prices suddenly rise, or benefits such as loyalty programs are scale back, rumors may start circulating, customers may start asking whether you’re closing, and in the worst-case scenario, it could get found by local or national media.