Small Business Bankruptcy
SB bankruptcy occurs when one is forced to declare that the business is going through financial strains that include debts therefore disabling business functions. What finally pushes a business towards bankruptcy is when the debtors, come calling wanting their dues and you know by no means can you settle the dents.
SB bankruptcy is easier to handle as compared to large companies though one has to go through all the heartbreak and headache of watch your business fail. This however should never be considered unless as a last option because once you write off your small business as bankrupt, you cannot revive it again. Discharge from a bankruptcy often works with individuals but not groups so in other cases, you would have to start from scratch as new business. If there are other options that you can work with to solve your problems, opt for them.
One thing you have to keep in mind before opting to file for chapter 7 is that a bankruptcy soils your credit/financial history. This can affect how you relate with banks and other financial institutions in future.
There are several reasons why a small business can fail leading to bankruptcy. Debts can overwhelm a business such that every profit made goes straight to paying out debts. This leaves the business suffering because it has no operating capital. The other reason is that, your business might be going through a financial breakdown and you feel that your business cannot be revived even in future leaving you with the option of writing it off and filing for chapter 7.