Bankruptcy can be a difficult decision for a small business, but it may be necessary to protect the company from overwhelming debt. The pandemic has had a significant impact on businesses, causing many to experience financial difficulties and lower profits. As a result, some companies may be unable to keep up with their payments and may accumulate unpaid balances and liabilities. If your business is struggling with debt, bankruptcy could be a reasonable option for a better financial future.
Experts believe that the health of the economy has a direct impact on the number of businesses that file for bankruptcy. When the economy is weak, businesses may have lower profits and less liquidity, making it difficult to make regular payments and keep up with debt. The pandemic has caused many businesses to struggle, and statistics show an increase in Chapter 11 bankruptcy filings in 2020. However, some experts believe the number should have been higher, as government aid and other efforts helped businesses and consumers during this time.
If your business is struggling with debt, it may be helpful to consider Chapter 11 bankruptcy as a way to confront your balances, protect your company from debt collectors, and remain operational. An assessment of your individual situation can help you make the best decisions for the long-term interests of your company. Contact a bankruptcy attorney to learn more about your options and how bankruptcy could help your struggling business.