Many business owners, when their businesses start floundering financially, look to bankruptcy attorneys to file for bankruptcy. While this is a perfectly normal and acceptable option, your bankruptcy attorney is still going to ask you what you have done to correct the fiscal problems on your own. If you really have not done much, your lawyer may suggest that you take the following legal actions before pursuing a bankruptcy so that you can keep your business and keep it going.
Go after Your Upaid Accounts Receivable
While it is very frustrating to be unable to pay your own bills and you may want to be compassionate towards others who are having similar problems, the point is that you need to go after any outstanding accounts receivable and get paid. A judge will want to know how much outstanding money you have that you are expecting customers to pay versus your debt load, and a bankruptcy is more favorable for you if you have already tapped all of the resources available. That includes the money owed to you, so if you need to extract money from customers, you could pursue it through a collections agency, or you could have your lawyer file several small claims suits.
Demand Up-Front Payment for All Services and/or Products
If you allowed customers to buy on credit or build a credit account with you, that practice will have to stop now. Anyone ordering and buying products and services will need to pay up front, just like they would if they walked into your business in person. If you are worried that it will cost you some customers, just let them know that this is temporary and you may return to credit billing in the future.
Look for Other Ways to Cut Expenses
Since your bankruptcy attorney as well as the judge who oversees your case will both want to know if you have any remaining business assets you can liquidate, look to liquidate now. Some of that inventory that you have been holding onto and cannot seem to sell is one such example. Equipment that spends too much time being idle is another resource for sale which could help your situation. If you look at everything your business owns and rents in the same way that a bankruptcy lawyer would (and will), then you will find other expenses you can cut and other things you can sell to help with your debts before you walk into bankruptcy court. Contact an attorney, like Morrison & Murff, for more help.