America’s recent economic decline has wreaked havoc with many small businesses and leaving their owners with increased debt and facing bankruptcy. Forbes notes that a recent U.S. Census Survey shows nearly 80% of small business owners are struggling with the changes in the country’s economy and running out of options to remain open.
If your small business is in debt and you believe bankruptcy is your only source of relief, you may have other financial paths open to you.
Renegotiate your debt
When the amount of your business debt far outpaces what you make in profits, reorganizing your debt may help you avoid Chapter 13 bankruptcy, which also gives you options for repaying creditors. However, reorganization without filing for bankruptcy protection can provide you with peace of mind that your business may survive your financial crisis. Working with an experienced attorney could offer you more options that bankruptcy may not.
Review your assets
While taking stock of your assets is often a step in any bankruptcy, reviewing them as part of a recovery plan may help you understand what you might have to work with when it comes to what you might sell or turn into cash. Create a list of assets that may hold value:
- Real estate
- Vehicles, including boats and RVs
- Antiques or jewelry
The total amount of your assets may help you renegotiate your debt without having to enter bankruptcy or negatively impact your credit score.
Low-interest business loans may give your business a temporary financial boost, but your payback options might be limited for this option. A stark review of debt versus profits can help you gauge whether bankruptcy is the best option open to you.