Proposal or Commercial Bankruptcy : Which is the Better Option ?

Your business is having financial difficulties and you’re seriously thinking of declaring bankruptcy. But have you thought about a proposal? It could be a good alternative if you don't want to close your business. Let's take a closer look at the advantages of each.

In short

Both commercial bankruptcy and proposals are ways to manage your debts. Depending on your situation, you can choose one or the other.

Proposal : A licensed insolvency trustee negotiates with your creditors to reduce the amount of your debts and/or extend the period of your repayment. Its advantages?

Keep jobs ;
Keep your property ;
Act quickly so your clients don’t change supplier ;
Get enough time to initiate a financial reorganization.

Commercial bankruptcy : It consists of selling assets to pay off your creditors and then closing the business permanently. It is a last resort. But it is still a good choice if the company cannot be made profitable again despite corrective measures.

In all cases, call on an insolvency trustee!

Commercial bankruptcy and the proposal are both solutions to debt. The proposal even allows you to release your business from your creditors. However, each has specific characteristics and is better suited to certain situations.

Proposal

The proposal consists of negotiating with your creditors to reduce the amount of your debts and/or extend your repayment period. This agreement will be made by a licensed insolvency trustee such as those at Raymond Chabot. This expert has the necessary skills to help you and be with you every step along the way.

There are numerous advantages to a proposal. In particular, it allows your business to continue operating and, therefore, to :

Keep jobs ;
Keep your property ;
Act quickly so your clients don’t change supplier ;
Get enough time to initiate a financial reorganization.

In addition, under a proposal it may be possible to terminate commercial leases and contracts that are too costly. In some cases, it also releases the business from its responsibility for unpaid government debts.

Commercial bankruptcy

Bankruptcy, like a proposal, allows you to put an end to any recourse initiated by creditors against your company.

Unlike the case with a proposal, all of the business’s activities are terminated. The licensed insolvency trustee is required to :

Liquidate your assets to repay your creditors ;
Close the business permanently ;
Remove the business from the register of companies.

This is why bankruptcy is considered a last resort. If you know that your business cannot be made profitable again despite corrective measures, this procedure may be the right choice for you. It will put an end to all your financial worries and give you peace of mind. To find out more, go to our web page on commercial bankruptcy.

Get support by a licensed insolvency trustee

Facing financial difficulties can be very stressful. The best way to make an informed decision is to use the services of a licensed insolvency trustee, who is in the best position to help you. This expert will analyze your situation, provide advice and accompany you without judgment at every step of the process, whether you choose to declare bankruptcy or file a proposal. Once the trustee has taken over the management of your debts, you will be able to get a fresh start and look forward to a better future.

Is your SME experiencing serious financial difficulties and you don’t know how to get out of it? Book an appointment with one of our insolvency experts. They will help you find solutions. It’s confidential, judgment-free and the first meeting is free.