Owning your own business can be exciting and give you the freedom to create a schedule that works well with other aspects of your life. When you own a business, you are responsible for every aspect of that business and it can become difficult when you start falling deeper and deeper into debt.
If debt starts to overtake your business and you are no longer able to meet your financial obligations, it can be hard to know what to do. For some businesses, filing bankruptcy is a great option to use when they need to get out of debt, but it is not right for every business. The following guide walks you through a few steps to take to stop drowning in debt.
Gather and Organize Your Proof of Income and Proof of Your Expenses
When you want to get advice as to whether or not you should file bankruptcy, you need to be able to show what the financial issues are with your business. Gather all bank statements, checks, and deposits that you can find to prove how much money you had coming into the business for the past six months to a year.
You need to prove how much money the business makes each month to show that you cannot afford to pay the debt that you have accrued. Being able to show proof of income for numerous months allows you to show if any changes have occurred during that time. Organize and group your income by month to show how much money came in from month to month.
Organize the bills associated with your business, as well. Do not forget to include wages that you pay to your employees, lease payments, and supply costs when organizing your debts. You need to show how much money you spend each month for the business and how much money you still owe to debtors that needs to be repaid.
Create a Profit Loss Statement
When you go to meet to talk about the options that are available to you when you are drowning in debt, you need to have a profit loss statement to show. The statement shows how much money you have coming into the business each month and how much money is being paid out each month. It is a detailed list that allows someone to get an overview of your debt to income ratio at a glance.
You can often create a profit, loss statement on the computer or have your accountant create one for you. The information that you gathered and organized regarding your business income and debt will need to be provided to the accountant in order for them to create the statement for you.
Learn What Options Are Available to You
Meet with a bankruptcy attorney to discuss what options are available to help your business get out of financial crisis. You may be able to consolidate your debt and pay a lower amount to eliminate the debt that you have. You may need to claim bankruptcy to stop debt collectors from coming after you for the debt that you owe.
There are certain stipulations that need to be met in order to claim bankruptcy for a business. The attorney can tell you which stipulations you meet and if there are any criteria you fall short on. There are a few different types of bankruptcy that you may be able to file and determining which is the best option for you can save you a lot of hassle in the end.
When you are ready to talk to a bankruptcy attorney about the options that are available to you, contact The Michelson Law Office. An experienced bankruptcy attorney will be able to go over the specifics of your situation to help you determine what approach is the best to take to handle your unique financial situation.
The Michelson Law Offices
Multiple offices throughout the Chicago Metropolitan Area
617 6th Street
Racine, WI 53403
Phone Number: 262-638-8400
3505 30th Ave.
Kenosha, WI 53144
Phone Number: 262-652-5050
250 East Wisconsin Ave.,
Milwaukee, WI 53202
Phone Number: 262-638-8400
Regus North LaSalle Center
203 N. LaSalle Street, Suite 2100
Chicago, IL 60601
Phone Number: 312-558-4399