Advantages Of Filing For Bankruptcy
When you have any business, you will always have to get money for investing by taking loans from different lenders to facilitate the different processes that are necessary to keep that business on its feet with the chance of repaying them from the profits made by the business. However, the company will not always make profits and it might experience a rough period during which it can be running at a loss with the income generated is less than the money that was injected into the entire processing and market procedures.
Filing for bankruptcy happens when you owe a lot of money to debtors and you want to keep them away for a while so that they do not disrupt you by asking that you pay the money back so that you can come up with a good plan on how you can get the cash to settle the loans you took. When you are in such a state, you can bring in your bankruptcy attorney who will prepare a bankruptcy request that he can take to a court of law and ask that your firm be exempted from honoring the loan repayment agreement you had with banks so that you get time to come up with a better repayment strategy.
Bankruptcy can affect this company in a way such that your credit rating is reduced in such a way that you might be denied from taking other loans because the new lenders will see that you have a bad history when it comes to loan repayment. Another provision is that your company will be obligated to present the tax income details of every financial period to make sure that your capacity to begin the loan repayment procedure is determined.
There are reasons why filing for bankruptcy is an important choice if your firm is in no position to start repaying loans owed. The first benefit is that there is the possibility of loan elimination whereby some of the old loans that you owed can be scrapped off to give you the opportunity of starting afresh so that you focus on rebuilding the company instead of attempting to pay the previous old loans.
Secondly, filing for bankruptcy helps to keep all creditors that gave you loans from your back so that they do not continue calling you all the time demanding and threatening that you repay the loan or risk your property being auctioned. Lastly, successfully filing for bankruptcy makes it possible to stop wage garnishment activities that require you to harass your workers by using a particular percentage of their wages to repay loans owed to lenders because all this does is to cause disharmony among the workers who might go on strike.