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Top 6 Tips to Avoid Bankruptcy

Avoid Bankruptcy

· Insolvency

When, as a company, you are not able to pay your employees, there is a certain upheaval inside your brain. Soon, you realize that you are not able to pay your employees or your creditors anymore. Long story short, you find out you have gone insolvent. In such case, there is nothing more to do that mull over how could you have avoided being insolvent while you file for bankruptcy. Well, while at this point, it is too little too late! Considering that the Insolvency and bankruptcy Code is geared towards ensuring that the Insolvent entity gets either sold in the market with dignity, or get sold in the market, with every part being up for grabs, you should know how you can prevent going bankrupt. The purpose of this article is a simple one, to teach your some simple tricks on how to avoid going bankrupt.

Bankruptcy Avoidance Tips

This list might be purely subjective. However, if you dig deep, you are going to be find objectivity in these tips. Therefore, read on for your leisure and if you want to know more, get in touch with us:

Tips to Avoid Bankruptcy
  1. Be conservative with your money: if you are running a business, the best thing is to assume that not every customer is going to pay to you or stay with you. There are always better options for the customers, and you don’t have the same versatility in terms of customers if you don’t diversify. Taking risks is cool, but make sure that your risks aren’t too much for you to handle.
  2. Write down your business plan: When you are starting your business, you only have a single plan, survive long enough to be able to expand, and even that plan is just inside your own mind. Make sure that you write it down, for when it comes the actual time for expansion, you have a base to implement upon so that your business can grow in a way that there is a positive cash flow.
  3. Prioritize how you repay your debt:  When you take a debt, then paying on time is something you always have to think about. Therefore, make sure that the amount of debt that you take is not more than you can afford to repay. If the debt is too high, find a strategy through which you can repay your debts.
  4. Eliminate the expenses that are unnecessary: If you want to find out where you can cut down some costs, just take a look into your bank account. If there are any costs that are unnecessary, make sure that you cut them out. Eliminating these expenses would help you in the long run for your business.
  5. Always stay in touch with your lenders: The best way to get an extension of your dates is to ensure that your relationship with your lenders is the best at all times. Therefore, make sure that you are always on time in addition to develop a personal level of relationship with them.
  6. Take a better look at your insurance policies: In India, the importances of keep in in touch with the insurance policies are extremely important. It is right! You need to take care of your family, about your health. However, the premium payment of these policies can put a serious dent on your finances. There is no harm in buying term insurances. These are cheaper and would help you plan better.

These are the 6 tips that would ensure that you have a way to not be bankrupt any time soon. However, if the insolvency does come to pass, then you have section 9 petition to look forward to.

If you want to know more about Insolvency and Bankruptcy then click here:

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