Filing for corporate bankruptcy does not necessarily mean that your business will close. While it’s possible that your business will close, and your employees will lose their jobs, there is another option that allows you to continue operating while still protecting you from creditors. The team at J. Bottoms & Associates Ltd. will help you determine which path is best for you when your corporation is in financial trouble. As a bankruptcy trustee, we know the appropriate methods to help your business in its time of need. The following are two options available to those corporations that are struggling to pay their debts:
Bankruptcy: As a corporation, filing for bankruptcy puts you in a legal state in which you have protection from your creditors. At the end of the process, the bankrupt corporation will likely no longer exist because all assets will be sold to repay the creditors.
Proposal: A proposal is different from bankruptcy in that it still allows the corporation to continue to operate, but still protects from creditors. It is the best option for a business that is still viable but needs assistance in restructuring its debts. In a proposal, a corporation will make an offer to creditors to pay a percentage of the amount owed, extend the repayment period, or a combination of both. The creditors will then decide whether to accept or reject the proposal.