Filing for bankruptcy is never a joyous occasion, but business owners should avoid thinking of the matter as an indication of failure. In fact, research conducted by the U.S. Small Business Association revealed that many businesses with fewer than 500 employees emerged from bankruptcy to find new levels of success in the years to follow. Maryland businesses in Chapter 11 are often able to fare far better in the years after a bankruptcy than they did in the years that preceded that action.
During a Chapter 11 bankruptcy filing, businesses are often able to remain operational. This means that businesses that serve clients or consumers will remain relevant within the marketplace and that a consistency of service can be demonstrated. There is also a psychological component to remaining open for business during financial troubles, and many business owners gain a sense of achievement for weathering that storm and coming out ahead.
That said, it can be a challenge to work with the court-appointed trustee. This can be especially difficult for individuals who have built their business on their own steam, and who have not had to work with partners or other collaborators. The trustee will have a great deal of influence on how the bankruptcy process moves forward, however, and it is vitally important to make this a positive professional relationship.
Businesses in Chapter 11 have a very good chance of emerging in a far better financial standing than when they began the process. Owners should try to look at bankruptcy as an opportunity, and not as a sign of a failing on their parts. By leveraging the existing bankruptcy laws, Maryland business owners can move past a period of financial uncertainty toward new levels of success.
Source: The Huffington Post, “Life After Bankruptcy: When and How Your Business Can Get Its Financial Groove Back”, Jared Hecht, Sept. 2, 2015