Renewing Your Business After You've Filed Bankruptcy
When a business files bankruptcy, it doesn't need to be the end of entrepreneurship. The business owner can go on to either rebuild their business after bankruptcy or start a new one.
Below are a few tips on renewing your business after bankruptcy:
Chapter 7 Bankruptcy Not The End
While Chapter 7 bankruptcy for business does spell the end of the road for that particular company, it need not be the end of the owner's forays into entrepreneurship. Business owners starting over from Chapter 7 bankruptcy are free to open a new business even if it is in the same line of work. There are no restrictions on what you can do after your bankruptcy exit if you want to start a new business.
Chapter 11 Bankruptcy Offers New Hope
If used properly, Chapter 11 bankruptcy can offer a new lease on life for troubled companies. Business giants such as GM and Chrysler, successfully used this type of bankruptcy to make their companies profitable. Planning, adaptation to market changes and aggressively lowering debt are all keys to using Chapter 11 bankruptcy to benefit your business.
Use Credit Cautiously
Businesses exiting bankruptcy should use credit cautiously to avoid the problems that led to bankruptcy in the first place. When it comes to taking on debt, post-bankruptcy businesses and business owners should only use debt when absolutely necessary and have a clear plan for repaying it. Remember, businesses cannot discharge their debts in bankruptcy, so your failure to treat debt respectfully could eventually lead to the unraveling of all your hard work.