No business owner wants to file for bankruptcy. However, it may be the best option if you are unable to resolve your financial problems. The good news is that a bankruptcy lawyer can make the process a lot easier. If you notice any of the following signs, then it is a good idea for you to call a bankruptcy lawyer.
1- Cash Flow Issues
There is a reason that the saying “You got to spend money to make money” exists. You do have to invest a lot of money in your business if you want to succeed. However, if you are consistently spending more money than you are making, then this is a sign that your business is not doing well financially.
2- Your Business Is Growing, But You Can’t Afford It
You may be surprised to find out that business growth can be a sign of financial trouble. The goal is to grow your business as much as possible. However, you are required to invest more money as your business grows. For example, you will need more equipment and supplies. You may also need to hire more people.
If your business is not making enough money to sustain the growth, then this can lead to major financial problems.
3- You Are Consistently Making Late Payments
The saying “Better late than never” does not apply to the payments that you have to make to keep your business afloat. It is normal for a business to occasionally make a late payment. One may overlook their invoices and forget to make a payment. However, if you are consistently making late payments, then this is a sign of a cash flow issue. Your business is not bringing in enough money to meet its financial obligations.
It is important for you to look at your accounts if your business has made a few late payments in the past year. If you find that you are consistently bringing in less than what you are spending, then it is time to call a bankruptcy lawyer.
4- You Cannot Get New Credit
Many business owners are able to solve their financial problems by applying for a new loan or credit card. However, if you have bad credit due to consistent late payments, then you may not be eligible for new credit. Bankruptcy may be the next step if you cannot obtain new credit.
5- You Are Dealing With Angry Creditors and Collections
Your creditors will not be happy if you consistently make late payments or do not pay at all. If you go for a long period of time without paying, then your delinquent accounts may be referred to collections. Debt collectors often try to settle for less than what you actually owe. This may be the best option for dealing with delinquent accounts.
However, if you are still unable to pay off what you owe, then bankruptcy is likely the next best step. It is important to note that failure to pay off collections accounts can lead to a debt collector taking legal action against you.