Close to Bankruptcy
Being close to bankruptcy can be one of the most
stressful experiences in life. Every day, whether
itís bankruptcy in your business or in your private
life, is an ominous foretaste of the financial disaster
to come. Every waking moment can be taken up with
wondering if financial ruin and the loss of your
investments can be avoided and how, if there is
a way, bankruptcy can be avoided.
Financial danger is often evident, as in the obvious
failure of being able to pay bills. Sometimes itís
insidious and not easily seen. Whether the possibility
of bankruptcy hits suddenly or creeps up behind
the scenes, the stress that comes as a result is
very real. The struggle with the anxiety that financial
ruin brings can lead to both mental health illness
as well as physical health issues.
How can you tell if youíre approaching insolvency?
There are ways to know.
In your business, the risk of insolvency can be
recognized by several signs. These include cash
flow problems, debt that is being defaulted on,
late payments to creditors, increasing pressure
from outside sources such as competitorsí pricing
and supplier reliability problems, too much reliance
on credit, and increased expenditures above the
A changing business climate can create more signs
of insolvency and the likelihood of bankruptcy.
Increased competition, a failure to sell products
with large inventories, labor problems, and hostile
governmental rules and regulations can all increase
the burden made on an increasingly thin financial
Personal bankruptcy has its own signs of impending
insolvency. Signs of impending bankruptcy are evident
when your ability to pay anything above minimum
payments on credit cards and loans becomes impossible,
mortgages and other personal loans are in default,
interest rates are raised by nervous creditors in
an effort to force your repayment of money extended
on credit, and regular household bills are going
unpaid. When the cash flow is shrinking and the
debt is on the rise, a dangerous situation is developing.
Be honest in your appraisal of approaching bankruptcy.
If you are close to bankruptcy, its time for hard
analysis and factual reporting, not resorting to
increased indebtedness to delay the inevitable or
slight of hand bookkeeping tricks that can land
you in jail. Using the legal protection afforded
in bankruptcy to manage unpaid debt can be the best
way out of an impossible situation and onto the
road to recovery. If you are considering bankruptcy
you should first obtain a professional advice at
Irresponsible spending and borrowing isnít the
only cause of accumulated debt that canít be repaid.
Debt can also be the result of factors that are
far beyond your control, both in the business world
and your personal life. Bankruptcy has its place
and is an option you always have.