Regardless of the industry, owning and operating a small business is challenging, especially in the economic environment of the 21st century. Most Austin, Texas, business owners face extremely difficult odds in terms of achieving financial success. When you factor in recurring expenses, it is easy to see why so many people struggle to stay in business while also profiting from their endeavors.
When debt becomes overwhelming, entrepreneurs have limited options. They can take immediate steps to reduce existing debt and expenses. They can allow the business to fail and try to sell off the company’s assets to pay off the debt. Either of these two options comes with a certain amount of risk in that the business debt may still be too much to handle.
A third and often-overlooked option involves considering business and commercial bankruptcies. In many cases, an experienced legal representative can help business owners identify which option might yield the best results. The most attractive benefits of business and commercial bankruptcy—in the form of chapter 11—includes the following.
- You will have more time to renegotiate your debt with your creditors and file a viable plan.
- You may be able to discharge some debts altogether.
- You may also be able to have some of your debt partially discharged.
- You will likely have a better chance of saving your business.
As with most financial remedies business and commercial bankruptcies also have a few disadvantages. The main disadvantage is the costs associated with a chapter 11 bankruptcy. However, if you seek knowledgeable legal guidance, you gain an excellent opportunity to determine if the benefits of bankruptcy outweigh its downsides.
Unfortunately, not all small businesses qualify for a chapter 11 filing. This is another reason why it helps to seek recommendations from a professional.