0021 - Debt Related Queston: Bankruptcy Question # 0021

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QUESTION #0021:

My business isn’t making as much money as I had expected, and I have had to use my personal credit to cover expenses, like wages and supply costs. My personal debt seems to be growing faster than my business can pay me. What can I do?



ANSWER:

Continued from last issue: If you have updated your financial records and find the business income isn’t enough to pay the debts, there are various restructuring options available. Sole-proprietorships are “personal debts” and have the same proposal or bankruptcy options as any individual debtor. An individual can continue to be self-employed while completing a proposal or bankruptcy. Limited companies can restructure through business planning, taking on shareholders with investment capital, or they can file a Proposal to creditors through a trustee. Limited companies can file bankruptcy, however, this is usually done only if there are realizable funds/assets to distribute to the creditors, or if it is realistic to sell the business.