A recent study by the FDIC shows that most small business credit card debt is unsecured. Most of these businesses are seasonal or new, and their revenue is usually lower than that of larger companies, which are more reliable. A number of these seasonal or new businesses fail within the first two years. The reason for this is usually poor cash flow management. In these cases, bankruptcy may be an option for how small business owners can avoid bankruptcy.
The most important thing to remember when considering bankruptcy is that you must act carefully and intelligently. If you do not take the time to find the right bankruptcy attorney, then your chances of a positive outcome are greatly reduced. This is a case where word of mouth and references from others can help you. Those who have had experience with bankruptcy proceedings can also be valuable sources of advice.
In Florida, there are certain rules and laws that apply to the financing of a business. A business must operate for one year prior to filing bankruptcy. Once filed, credit card accounts must remain current throughout that period. Credit cards can be declared dead if a company is insolvent. It is also illegal to personally guarantee the payment of any debt owed to a creditor, including a credit card.
While it would be nice to think that a bankruptcy attorney could help you out every time you find yourself in this situation, in reality, bankruptcy lawyers are not good at predicting how a company will perform a second time around. This is because of many factors. One is the fact that a company's financial situation changes over time. A seasonal business may be helped by credit card sales during Christmas and New Year's. But if a company is making money hand over fist, bankruptcy may not be an option when it comes time to pay back credit card debts.
Bankruptcy can destroy a small business in a matter of months. Credit card debts can result in the immediate shutting down of a business. As soon as a bankruptcy lawyer represents a client, this company's credit rating and ability to borrow from banks are affected. The very credit that helped bring a business into existence can be ruined in a matter of months when that business is deemed insolvent.
If you find yourself in this situation and think bankruptcy might be your best option, you should contact a bankruptcy attorney as soon as possible. There may be other avenues you can take to protect your business. Small business credit counselling services can be found all across the country. If your company is facing bankruptcy, do not risk losing your business and the money you have worked so hard to obtain.
If you are facing trouble in filing for bankruptcy in Tampa, you can contact the experienced attorneys at Galewski Law Group. For more information, You can call us at (813) 222-8210
Comments