How to Get Back on Track After Bankruptcy

Every business owner is afraid of the word bankruptcy because even though the rates of insolvency are reducing, they still continue to be quite high. Business owners are trying their best not to face bankruptcy because most businesses do not make it after several years.

However, people think that bankruptcy is the end of everything and there is no coming back. This is where most of the people get it wrong. This is not a death sentence. Of course, bankruptcy is not the most wanted situation, but it is possible to get back on track. So here are some things you should consider if you are planning on getting your company running again after bankruptcy.

Types of Bankruptcy

You have to first identify the type of bankruptcy you faced in order to deal with it afterwards. There are six main types of bankruptcies such as liquidation, repayment plan, large reorganization, family farmers, used in foreign cases and municipalities. The most common types are liquidation, repayment plan and large reorganization. For this you can obtain assistance from business bankruptcy professional to figure out the type of your bankruptcy.

Learn from Your Mistakes

One good thing about failure is that it gives you the opportunity to learn from your mistakes. You should never miss this chance. Carefully look at the reasons as to why your previous business didn’t work out, what you did wrong and what you can do in order to avoid any such mistakes in the future. So, it is important to closely inspect your past operations and find out what made your company go down.

Then try to make a feasible plan to make sure that the same mistakes don’t repeat in your new business. Apart from this see if you can earn from your bankruptcy. You would be surprised at how much can a bankrupt earn with the help from a professional to understand. Follow necessary procedure for this purpose because you have to get all the funding possible for your new business.

Regain Your Credit Score

Your credit score will sink once you file for bankruptcy. It will then be difficult to get access to the funds you will require for your new business. Usually, business owners who file bankruptcy are very less likely to get a loan approved. Even though this is discouraging, this situation should not remain as it is.

So, you have to start rebuilding your credit score. This will take a while. However, you have to make all efforts including smallest ones to build up your credit score. You can start with simple things like paying your bills and making credit card payments. Remember that every single effort can make a big difference.

Get the Required Funding

Your new business needs funding. So, you have to find possible sources to obtain funds while improving your credit score at the same time. You will require help from someone else because self-funding will be difficult at this stage. Find a partner who has a good credit score if possible, in order to obtain loans, you need. Another way is to avoid traditional financial institutions like banks and consider having an angel investor instead.

Research more into your situation and act accordingly. Don’t give up just because you went bankrupt once. Even though it won’t be easy, it is always possible to get back on track.

Delsie Leff
 
 

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