Debts build up, cash flow changes, economies rise and fall, and uncertainties increase, and entrepreneurs and business owners may need to reevaluate their financial standing accordingly. However, running into financial trouble does not necessarily mean that a company needs to close shop and declare bankruptcy. Restructuring and reorganization strategies developed by an experienced commercial bankruptcy attorney give business owners more flexibility in finding a solution with their creditors rather than declaring bankruptcy.
When to Hire a Bankruptcy Attorney
Working with a commercial bankruptcy lawyer at the first sign of financial trouble is perhaps the most essential practice to avoid bankruptcy. Giving an experienced commercial business attorney as much time as possible to develop a strategy increases the likelihood that your business experiences a favorable outcome. Companies that wait too long to hire a bankruptcy attorney may have no choice but to file for bankruptcy, lose valuable assets, or experience limited flexibility as they attempt to restructure. Skilled commercial bankruptcy attorneys often ask for six months or more to develop and recommend a viable strategy to help businesses restructure and reorganize successfully. However, no window of time could predict the economic changes brought on by the coronavirus pandemic, and even a short window of time will allow for a strategy to be conducted.
Business Restructuring and Reorganization Strategies
The flexibility offered to business owners as they work to recover from financial challenges is one of the most significant benefits of restructuring and reorganizing. The first step for many companies considering reorganization is to settle and consolidate as many debts as possible by working with a commercial bankruptcy attorney to negotiate with creditors. Committing to private repayment directly with creditors gives companies the opportunity to pay back debts without filing for bankruptcy and having assets seized and liquidated by a court.
As corporate accountants often maintain the clearest, most objective perspective on a company’s financial situation, businesses hoping to avoid bankruptcy must work closely with their accountants throughout the restructuring and reorganization process. The best accountants should be able to develop a monthly and yearly budget that limits unnecessary spending, maximizes profits, includes paying down debt, and is realistic enough that your company can operate successfully within it.
Other Options for Businesses in Financial Trouble?
While it is often preferable for companies to restructure and avoid bankruptcy proceedings entirely, this may not be an option for every business. A commercial bankruptcy attorney can expand upon all of the options available to a business owner, including different strategies for restructuring and reorganization, formal mediation with creditors, and filing for Chapter 11 or Chapter 7 bankruptcy. However, business owners who want to take full advantage of all of the options available to them should begin working with a commercial bankruptcy lawyer at the first sign of financial trouble.
If you think your business could benefit from a consultation with an experienced commercial bankruptcy attorney, contact Ritter Spencer Cheng PLLC. David Ritter is a skilled bankruptcy attorney in Dallas, Texas with over 25 years of experience helping businesses overcome the challenges of bankruptcy litigation. Whether your business needs assistance developing a restructuring or reorganization strategy, filing for the proper chapter of bankruptcy, or mediating with creditors, the team of commercial bankruptcy attorneys at Ritter Spencer Cheng PLLC is ready to work with your business.