Bankruptcy Law Firm in Memphis, TN
Bankruptcy can help a business shed burdensome debt obligations so that it can re-emerge stronger and healthier. That being said, it is certainly not the best solution for every financially distressed business. In some cases, there may be more desirable alternatives that will allow a company to avoid bankruptcy. If your business is facing cumbersome debt obligations, please contact an experienced business bankruptcy attorney today to learn more about your legal options.
Business Bankruptcy Alternatives
Debt consolidation: Your company may be able to get back on a sustainable financial path using debt consolidation. Essentially, debt consolidation requires your that your company obtain a large loan that can be used to pay off several different smaller loans. When used in the correct situations, consolidation can save a business a substantial amount of money. If your company has many different loans at high interest rates, consolidation could make sense for you.
Debt restructuring: Voluntary debt restructuring may be another desirable option for your business. A debt restructuring is a negotiation between your company (the debtor) and the creditors. You may be able to get the creditors to agree to alter the terms of your debt. In some cases, this could be done by simply extending the repayment period. In other cases, it may be done by reducing your total debt obligation. Voluntary debt restructuring can help some companies avoid unnecessary bankruptcy.
What Are the Drawbacks?
Neither debt consolidation or debt restructuring makes sense in every case. They may not provide answers to the financial problems facing your business. Remember, these alternative strategies may be able to reduce your debt burden, but they will not remove your debt entirely. In addition, sometimes a debt restructuring may require you to convert previously unsecured debt into secured debt. This may be the only way to get a creditor to agree to the terms of your plan. Ultimately, debt restructuring is only a good idea for your company if it can ensure that your problems will be fixed.
In other words, you should only seek to restructure your debt if that will truly put your company back on a sustainable path. Far too often, companies choose to restructure their debt and then subsequently end up in Chapter 11 or Chapter 7 bankruptcy anyway. This should be avoided, as it means that your company will have wasted significant time and resources in the initial restructuring process. If your business is going to eventually require bankruptcy protection, it is best to take swift action.
Contact an Experienced Business Bankruptcy Lawyer
A bankruptcy law firm in Memphis, TN, like Darrell Castle & Associates, PLLC, has helped many businesses restructure their debt. If your business may be facing bankruptcy, please allow a legal team to review your case. They can help your company find the best solution to its financial problems.