Forgo Bankruptcy with Faster Financing

It's possible to stave off a business bankruptcy by getting financing or selling your accounts receivables (also called factoring). US Federal Courts reports, "Business bankruptcy filings totaled 43,546 in 2008, up 54 percent from 2007. In 2006, such filings totaled 19,695."

Many companies on the verge of bankruptcy are doing well except debts trip them up. Private financial organizations can help businesses find a way to get the needed cash flow faster to hold off bankruptcy. First, keep up with your tax payments otherwise penalties pile up and you can't catch up.

When you shop around for financing help -- whether by loan, line of credit or factoring -- be ready to ask and answer questions.

You might consider renegotiating debts your business owns or work with a credit counselor. A credit counselor can also help restructure business debt as another way to avoid bankruptcy. Companies rather receive part of the debt you owe them than for your company to file for bankruptcy. In filing bankruptcy, the companies will never see a dime of what you owe them.

The advantage of dodging bankruptcy is that it helps you business maintain good relationships with its vendors and creditors. Filing a chapter 11 or 13 bankruptcy can jeopardize those relationships.

Here are a few more things you can do to avoid bankruptcy:

1. Merge your bills with care or else it could lead to more debt.
2. Move all high interest credit cards onto a lower interest credit card with low or no charges and fees.
3. Work with a financial advisor or a bankruptcy attorney.

Bankruptcy is the very last thing you want to do. While it may free you of some obligation, it'll cause emotional stress. It means involving lawyers, trustees and court. It can occupy your time for over a year and you give up control of your business to the court and court-appointed trustee. Finally, it leaves a black mark on your credit, something you might need in the future.

Besides, bankruptcy laws are tougher than they used to be, which would make it harder for businesses to start with a clean slate. In some situations, the courts require the business owner to file personal bankruptcy. Legal fees also cost much more than working with a private financial organization.

A financial organization can help you with many of these, so you don't have to go to multiple organizations. These organizations can also deal with your accounts receivables giving you some relief from a stressful situation.

So before you think Chapter 11 or any chapter, find a financial organization or a debt counselor.