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The last thing you imagined doing when you started your business is going bankrupt. Obviously, you were aiming much higher, and you're a survivor, and you would like to avoid making this particular dreaded declaration.
So what can you do? Let's take a look at what exactly bankruptcy is and three steps you can take to avoid it.
What Is Bankruptcy?
There are multiple types of bankruptcies, and you may be familiar with the terms associated with the most common of them, Chapter 7 and Chapter 13. But generally speaking bankruptcy is a federal court procedure that helps consumers and businesses to either liquidate or reorganize, clear debts, and pay off creditors.
3 Bankruptcy Tips
Word to the Wise
Some experts suggest asking family and friends for help to avoid bankruptcy. Think about this very carefully, as it is not necessarily great practice to mix business and pleasure, much less business and relatives. Some families do business together of course, but if you can find an alternate source or can try some extreme cost-saving measures first, it's worth it.
Talk to a Lawyer
If your business is struggling financially and you are wondering about bankruptcy but wary about spending money to get guidance, do not. Consult with an attorney and get advice that is specific to your business and situation. Many bankruptcy attorneys consult for free or a minimal fee and will be happy to assess your case.
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