Five Warning Signs Your Business Is Headed Towards Bankruptcy
Large and small companies alike have weathered a wavering economy and drastic reductions in business over the past year due to the COVID-19 pandemic. As a result, for the first time since March of 2020 the rates for business bankruptcy have begun to spike. In many cases, filing for bankruptcy is the best option in terms of directly addressing ongoing problems and even salvaging your business. The following details current risks and five common warning signs that the time to consider filing is fast approaching:
As Business Bankruptcies Increase, Is Your Company At Risk?
According to recent news releases, March 2021 figures show more than 43,000 new business bankruptcy filings, representing a spike of more than 40 percent since the beginning of the year. While market analysts were largely taken by surprise when the number of business bankruptcies did not skyrocket during the height of the COVID-19 pandemic, federal Payroll Protection Loans and other programs likely played a major role in keeping businesses afloat. As COVID economic recovery continues and these programs are eliminated, this new surge in bankruptcy is expected to continue for the foreseeable future.
How has your company weathered fluctuations in business and are you seeing any indicators that bankruptcy may be imminent? The following are five common warning signs:
- You are routinely falling behind on payments. One of the most obvious warning signs, missing even one monthly payment could put your business at risk. Falling behind three months or more makes it nearly impossible to ever get caught up.
- You have exhausted all your sources of credit. In addition to maxing out lines of credit with suppliers, you may already be tapped out when it comes to taking out business loans or even using your home equity to secure funds.
- You are being forced to surrender certain property or assets. Making the choice to have to surrender property, equipment, or reduce your supplies is a one-time solution to what is typically an ongoing problem.
- You are increasingly being harassed by creditors. Credit collection calls can quickly become a nightmare and can lead to more serious legal actions.
- You are ineligible for other debt management programs. While there are programs designed to help struggling businesses, you may have reached the point where you are ineligible.
Let Us Help You Today
As a business owner, you need to take firm action if you are experiencing any of the above problems. Failing to address the situation through a Chapter 7 or Chapter 11 bankruptcy may compel creditors to force you into bankruptcy proceedings.
At the Law Office of Harry D. Lewis, we provide the trusted legal guidance you need in this situation. Our New York City business bankruptcy attorneys can guide you in the options available to save your business and to protect yourself from further liability. Give us a call or contact our office online and request a consultation today.