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Things that tend to happen before corporate bankruptcy

As the owner of a company, you're hoping to put bankruptcy off and stay afloat. Before deciding that it's actually in your best interests to declare bankruptcy, there are a few things you may try, options other owners just like yourself often turn to as they search for answers.

First of all, you may grow cautious. When you started your company, you knew that risks were needed and you embraced them. Now you'll be ultra careful as you try to limit mistakes and losses.

You may also start to lose some of your best workers. They'll know that things aren't going well; they may have inside information about funding, or they may just have a gut feeling. They'll start seeking other jobs. You may enjoy the reduction in expenses at first, but these were your best workers, and losing them hurts.

In addition, you may stop hiring new workers. Even as your best employees quit, you'll hope that the reduction in payroll can save the company.

You may also try to reorganize. This is often just a fancy way of saying you'll combine jobs to save money and see if one employee can do the same job that two were previously doing. You know there's a risk of sub-par results and burnout, but you need to save money.

In the end, you may wind up considering bankruptcy to see if it can give you the fresh start you've been looking for. Remember, many other business owners have been in your position before; just focus on looking into and understanding all of the legal options you have.

Source: Wise Bread, "10 Signs Your Company Is Going Under," Paul Michael, accessed June 28, 2017

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The Law Offices of Ronald I. Chorches

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