Filing for bankruptcy is every business owner’s worst nightmare. Many see it as a clear sign of failure. However, if bankruptcy seems to be in the cards for you, you have to understand that it’s not the death sentence most people make it out to be. Filing for bankruptcy can give you a chance to reinvent your brand and start on a clean slate. Especially if you have exhausted all your options to repay your insurmountable debts, bankruptcy can be the lifeline you need to stay afloat. However, to make bankruptcy work for you, you need to have a solid plan. Here is what you need to do after filing for bankruptcy.
Take the Time to Process
It’s completely normal to feel disoriented or even depressed after filing for bankruptcy for your business. It will take you some time before you can look at the bright side and see the possible opportunity at hand. The first thing you should do is to give yourself time to process the situation you are going through and move past the initial shock. You can seek help, maybe even schedule a few sessions with a therapist to help you process your feelings and adjust your mindset. You can also join a local support group. Sometimes when you are surrounded by others who are going through the same experience, it can encourage you to get out of your head and overcome your trauma.
Plan Your Financials
After clearing your mind and processing the situation, it’s time to start planning for your future. With your past mistakes in mind, draft a thorough plan regarding how you can best manage your finances without lowering your credit score any further.
It’s most likely that your credit score was already poor before filing for bankruptcy, and in that case, it’s best to take advice from the experts. As mentioned by Bankruptcy Attorney Tristan Brown, using credit more responsibly after going bankrupt is key to rebuilding your credit score. It pays to know that banks and other lending institutions will be more willing to grant you personal and car loans right after filing your petitions since you can’t file again for another 8 years. You should make use of this to put a clear and strict financial plan that can help you to move past bankruptcy.
Get a Job
Right after you file for bankruptcy, you should be directing all your efforts towards getting back up on your feet. Start looking for a job right away to maintain a steady source of income. This will help you rebuild your credit score and encourage other employers and property owners to give you a chance. A new job will also act as a safety net until you can revive your business. However, as a previous business owner, you should manage your expectations and understand that the new job probably won’t restore your old lifestyle. Furthermore, many employers might be reluctant to hire you given your current situation, so you have to be patient. Keep an open mind and focus on the big picture.
Be Vigilant About Timely Payments
Filing for bankruptcy will, unfortunately, put you in a sensitive position where the slightest mistake can be blown out of proportion. You no longer have the luxury to ‘miss’ any due payments, whether they are utility bills, rent, or any other types of payments. Committing to timely payments will help restore your business’s reputation and encourage suppliers and other stakeholders to lend you a helping hand. You should also consider utilizing technology to set up an automated payment system so you never miss a deadline.
Protect Your Business Network
It might be difficult to face your business associates and colleagues after filing for bankruptcy. However, there is no need to feel humiliated and distance yourself. If you want to go back to business and leave bankruptcy behind you, you should do everything you can to protect your network. Show up at industry events and stay in contact with your colleagues. Let them know that you are looking to rebuild your business and seek potential opportunities for collaborating. As long as you are offering them a chance for mutual benefits, they will be willing to help or at least offer their advice.
Work on Product/Service Enhancement
Being forced to slow down after filing for bankruptcy can be a golden opportunity to research different ways you can improve your product. Study your market and look for new trends that your customers are following. You probably never had the time or motive before now to do this. Schedule weekly meetings with your team to go through your customer’s online reviews and start from there. You should also consider building new partnerships and exploring new and exciting business deals. Who knows, you might end up feeling grateful for going bankrupt!
While it’s easier said than done, this is the only way you can reap the rewards of bankruptcy. Constantly remind yourself that this is a temporary situation and that it doesn’t define your capabilities as a business owner. Once you set your mind to view this phase as a harsh lesson that you had to learn, you will be better able to stay positive and make the best of what you have.
Hopefully, this guide can help you understand that the stigma associated with bankruptcy is not entirely reasonable. Most of today’s business tycoons have gone through bankruptcy at least once in their lifetimes, and it only made them more resilient and passionate about rebuilding their businesses. This is not to say that it’s going to be an easy journey or that you won’t feel like giving up at some point. But, it all comes down to how much faith you have in your business and whether you want to resuscitate it. Accept support from your friends and family during this hard time and use the above tips to help you devise a winning comeback plan.