As a corporation suffering from uncontrollable debt, you’re likely at the point where you’re weighing the options on filing for bankruptcy. While it’s maybe the best option for you, don’t think it’s the only logical choice. A debt workout or settlement can potentially become better because you’re eliminating the complexities you’d face going through court.
Even if you have a bankruptcy attorney on standby who assures the procedure can easily work in your favor, don’t think you still won’t run into difficulty. Sometimes time is of the essence, including needing more negotiable terms on your debt while in the middle of a merge or acquisition.
Also, consider what bankruptcy would do with your reputation, including regulatory consequences. Even cost is a major factor.
Here’s why a debt workout is perhaps better for your corporation’s situation.
More Room for Negotiations
If your corporation has ever gone through bankruptcy in the past, you know negotiations with creditors is often difficult. Of course, the price you pay to a bankruptcy attorney pays for ridding yourself of all debt quickly.
The problem is that bankruptcy isn’t fast, including with companies like yours. A financial consultancy team can do a debt workout for you to allow more open negotiations with those you owe money to.
Since your situation is perhaps unique, the freedom to negotiate allows customized provisions best fitting each side’s needs. Terms and agreements can become stretched out to make them more manageable. An informal negotiation meeting is also less intimidating as it usually is through bankruptcy court.
Working Out Your Debt Negotiations Faster
It could take months or maybe more to complete a corporate bankruptcy. Time is perhaps a major factor if you worry specifically about your company’s value during a bankruptcy proceeding. Such a scenario could go on too long and end up leading to liquidation of your assets before bankruptcy completion.
Negotiations for a debt workout always go faster since you don’t have to follow legal timetables. With an effective debt settlement team working by your side, they can mediate on your behalf to speed things up further.
Now you won’t have to feel like you’re battling an hourglass to keep your company alive.
Giving You Confidentiality
When you file for bankruptcy, it’s going to become public, sometimes in embarrassing ways. Your corporation is maybe well-known locally, nationwide, or even internationally. Despite corporate bankruptcies being overly common, it may start a chain reaction of speculation that could create problems in hiring new employees to turn yourself around.
Through financial consultants, you can do a more private debt workout to avoid headlines in all the newspapers. Most of all, you remove all bankruptcy stigma so easily spread, regardless of press coverage.
Investors in your company also won’t panic as much since doing debt negotiations gives a stronger peace of mind you’ll solve your financial problems. Considering bankruptcies stay on record for years, you won’t have a sword over your corporation’s head.
Keep in mind not filing for bankruptcy now allows you to do a bankruptcy later if you absolutely have to.
Not Having to Spend Extra Money
Recent statistics show the average cost to complete a corporate Chapter 11 bankruptcy is often $50,000 or much more. This doesn’t reflect what kind of debts you might have, which could increase legal costs further.
It’s all the more reason to consider a debt workout since it won’t cost a fortune. Paying for a consultancy team to help you through the negotiations won’t cost nearly as much as filing for bankruptcy, saving you further financial problems ahead.