How To Declare Business Bankruptcy
Each business has its own cycle. During each business cycle, a business can connect with another business, absorbed into a larger one, or be a victim of business declining. When your business gets affected by the latter, you might consider closing it. If a business starts to decline to the point that you cannot handle its debts anymore. Then most of the business owners will recommend you to file for a business bankruptcy.
But, do not think that when you file for business bankruptcy, you will stop operating your business. Think that business bankruptcy is just one of the many ways that you might consider to survive and repay all the debts of your business. One of our insolvency Red Deer trustees can help you with the process and answer any questions that you may have.
In this post, we are going to provide you with the things that you should do on how to declare business bankruptcy. If you are planning to file for a business bankruptcy and don’t know where and when to start. You are in the right place. So, if you want to learn how to declare for a business bankruptcy, keep on reading and enjoy!
Steps For Filing a Business Bankruptcy
Filing for business bankruptcy can be done in three easy steps.
- The first thing that you should do when you considered filing for business bankruptcy is to look for a reliable and trusted Red Deer insolvency trustee. After this, have them file the needed paperwork. If your business has a high possibility to close and you are not capable of paying the debts. We recommend you to file for a Chapter 7 Bankruptcy. This form of bankruptcy will enable the business assets liquidation and make use of its proceeds in paying the creditors. The creditors have a wide range of options to be included or declined in the process of business bankruptcy. On the other hand, if they are going to decline, they lose their rights in receiving the debt payments from the closed business.
- The next step is business assets liquidation. Together with the going out of business equipment, fixtures, and sale that was owned by the supplies, chairs, desks, and business will be considered for sale. It is because a falling business is in need of having a capital that is enough to pay the business debts to its creditors.
- Payment plan creation for the business creditors. Our insolvency trustee Red Deer professionals can help with this as well. Your business creditors will be separated into two sections, the unsecured creditors and the secured ones. When we say secure creditors, including lien holders or mortgages. Have the collateral in falling back on the vehicles, equipment, and or buildings. On the other hand, the unsecured creditors are a type of creditor that doesn’t have the debt collateral. The insurance company, as well as the credit card company, are examples of unsecured creditors. The secured creditors are being prioritized by the company compared to the unsecured ones. It only means that you need to pay the secured creditors first, and the unsecured ones second.