What You Don't Know About Bankruptcy

It has been said that "prior planning prevents poor performance." These five p's are certainly valid today, when economic changes are causing businesses to feel pressure in regard to cash flow. A good business manager looks at potential opportunities and threats that may be ahead. For many in real

Some companies fail because they leverage too much, grow too quickly and get caught up in easy credit when times are good. When things slow down, banks pull credit and are more cautious of all their customer credit. They need to limit their risk, too.

So what happens if your business faces real trouble - even bankruptcy?

The right to bankruptcy is a constitutional right. It is found in article I, section 8, clause 4 of the U.S. Constitution.

For businesses, bankruptcy is filed either under Chapter 7 or Chapter 11. Chapter 7 is a liquidation proceeding available to individuals and businesses. Chapter 11 is a reorganization proceeding in which the debtor may continue in business or in possession of its property as a fiduciary. A confirmed Chapter 11 plan provides for the manner in which claims will be paid partially or totally by the debtor.