What Can You Do to Help Your Business?
Part 3 of 3

Here are the last 4 tips of a three part series on Businesses in Trouble: 

1.                 Plan for Ongoing Insurance Coverage. If you do end up declaring bankruptcy, you will have a hard time getting insurance as they will see your financial picture as pretty bleak. So if you are planning on declaring, make sure you have paid your insurance for the next 12 months so that you have insurance. Be sure to pay your payments on time as well, so that the insurance cannot be cancelled.  

2.                 Don’t Panic About Utilities or Lease Payments. If you declare bankruptcy, the utility companies cannot use your bankruptcy filing as an excuse for shutting off services, but they can require a deposit. And as long as you continue to pay your rental payments you cannot be evicted from your place of residence.

3.                 Return Unneeded Leased Property. If you have equipment or furniture that you won’t want to keep after the bankruptcy filing, return it back to the leasing company before hand. If there is a difference in price, for example it is worth less than what you owe, this amount will be discharged in bankruptcy. But if you want to keep it, you have to keep paying on it.

4.                 Don’t Borrow from the Company Pension Plan. If you borrow from the plan you could end up paying a penalty of up to 115% of the borrowed money. Plus, if you don’t pay it back you could end up paying income taxes as well as further penalties of 10-25% on the loan.  ■

Related Articles:

What Can You Do to Help Your Business? Part 1 of 3

What Can You Do to Help Your Business? Part 2 of 3