Introduction
- Are you a business owner that has suffered because of the Coronavirus Pandemic and are not being able to continue with the business?
- Do you know how you will be able to walk out from the piling loans and debts and save your property?
- Have you looked at legal channels like bankruptcy that can help you, both in the short, we all as in the long run?
The disastrous effects of the pandemic on small and medium businesses have been documented by several platforms. From global international organizations to banks that have raised concerns about defaulters, businesses have suffered a lot.
In this article, we discuss a particularly sensitive issue that most business owners do not want to engage with- bankruptcy. We discuss why it can be a good strategic and tactical decision and how you will be able to rebuild your life post suffering a business debacle.
The Negative Effect of the Pandemic on Small and Medium Businesses
Business owners who up until the pandemic were running successful businesses suddenly found themselves without buyers, rising costs, and nationwide lockdowns. While there have been success stories, the majority of small and medium businesses have faced rising losses.
With raw materials lying in warehouses, no availability of labor, rising electricity costs, and unending bank interest rates, the pandemic saw a similar story in different parts of the world.
Some businesses that were successful in making the transition to digital platforms, was able to barely sustain themselves from the onslaught. Investments slowed down, and growth saw a downward spiral. With individuals looking to save and conserve money because of future uncertainty, many industries saw zero sales for more than four months!
List of 5 Reasons why Filing for Bankruptcy can be Good for your Business
Avoid Debt Obligations-
Businessmen need to realize that bankruptcy is a financial and legal instrument that entitles a business owner to save themselves to an extent. It is wise to sometimes take the prudent decision so that you can stop all the requests and demands from creditors and debt collectors. No one can file a lawsuit in the period the bankruptcy is in play.
Saving your Property from Repossession-
It is not that your way of running the business was to be blamed for the downfall. In fact, businessmen need to realize that it was an ‘Act of God’, that has led them to this condition. Filing for bankruptcy Birmingham can help in saving debt collectors and creditors from attaching your property for settling pending dues. This will be done via a court order.
Help you Start once again with a Clean Slate-
Businessmen worry about their credit scores getting affected. However, it works the other way around. Once you file for bankruptcy, you are free of all debt obligations. Within a few years, the credit score starts seeing a major upward tick and you can resume a new business with a clean and fresh slate. This is one of the major advantages of filing for bankruptcy.
This is a Sound and Strategic Tactical Business Decision-
Rather than thinking of it in terms of stigma or blaming yourself personally for the condition the business is in, it is important to be prudent and rational. Most legal experts that deal with bankruptcy state that for many businessmen, this can be the best business decision of their life. In fact, you will be surprised to know that some of the biggest businesses have done the same.
Creates a Better and Safer Mindset towards a Future Business-
Businessmen who have started new businesses post-filing for bankruptcy say that they are now much more financially prudent than they earlier were. They have been able to manage their finances better and save heavily for a rainy day. In fact, businessmen have been able to adopt strategies that have helped them in making their businesses future-proof.
The Final Word
No one could have seen the Coronavirus Pandemic coming. Neither could have it prepared us to deal with it. With things coming back to normal, it is high time businessmen cut their losses and start thinking afresh. Bankruptcy is a financial instrument that can just help them create a better future.
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