Who may initiates bankruptcy in economical crises?
1) Experienced businessman who prefer to lose now less, and then catch up. They order financial and legal audit, the outlook for its current expenses for 6-12 months, and realistically assess the prospects for earnings in the coming year. Unfortunately, now in crisis, in most cases, the real prospects are the need to cut off and freeze the assets of problem areas and prepare the last to legal bankruptcy. Now, for many trading company bankruptcy is the only way to lose business, but keep the money and property. To then start a lot from the beginning, but not “from zero”. If you do not go into detail, you can write off the debts of the bankruptcy. Under this option, we can tell you a few extra tips to protect your image and your assets: before the filing for bankruptcy it is better to change the name of the company. It will probably necessary to change the legal address, director and founder.
2) Another, quite psychologically difficult, but popular choice for manufacturing companies – wait out of the total financial crisis and the introduction of non-payment period of the “protective shell” – a procedure to follow with subsequent transition to financial recovery. In this case your business is continuing to work, you can always stop the bankruptcy of a settlement agreement in the Court, so your assets during this period is completely protected from any law enforcement officer. However, this route is available in the main holding / interconnected groups of enterprises with intra payables (roughly speaking, if “a creditor in the amount of more than 51% of debt), or that there are many scattered small creditors, or a very thorough advance preparation business. The fact is that if you have an external creditor for the amount over 51% of total debt, it to protect its interests will simply be forced in any way to change the chosen arbitration manager in “their”, which will probably try to put pressure on you.
In this case it’s better to hire a psychologically stable top-manager – the manager with the experience in crisis management, who will be “appropriately, in accordance with the legislation to solve” the issues with staff and partners (difficult but possible to hire a manager in expense of future income business recovery)..
This option is acceptable for frozen construction projects, importers and manufacturers of goods of not daily necessities, etc.
If you prefer “not to have surprises in the Court ” we recommend you to do a thorough pre-audit accounting and legal service of the firm. You should do it so that on the one hand, they have been handed the maximum coincided with the balance sheet and on the other hand, the bankruptcy court review of documents was “significantly unintentional”.
Practically all of us still remember the times when it was possible to buy a thing even if one had not enough money. Loan was a simple way out. It is little wonder that now many of those who hunted for a loan, are looking around for how to avoid bankruptcy.
Those people who managed to get into the situation when their expenses exceed their earnings, definitely must search for ways to avoid bankruptcy.
If facing such difficulties it is smart to use any tools to get over it. Use such wonderful opportunity as the web technologies. Using them at full capacity will give great results. Working with search engines, forums, social networks,web sites one can find lots of tips to avoid bankruptcy and a great deal of other respective info. Also subscribing to RSS on this blog will help to keep abreast of new publications and tips on the topic.
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