Corporate Bankruptcy in British Columbia
Claiming Corporate Bankruptcy in British Columbia
Is your company struggling to repay its debts? Perhaps no matter what you do, your bottom line is still coming up short. If you’re dealing with financial woes, the team at J. Bottom & Associates may be able to help. We work with business owners in New Westminster, Port Coquitlam, and North Vancouver, helping them protect their interests and salvage their company through the bankruptcy process. While corporate bankruptcy may not exempt you from personal liability, it may still be the best solution if other methods have failed. So, let’s explore the corporate bankruptcy process and how we can help.
Chapter 7 Vs. Chapter 13 Bankruptcy
In British Columbia, businesses can declare one of two types of corporate bankruptcy. Talk to a professional about which of these processes is right for you:
- Chapter 7 Bankruptcy—This type requires clients to liquidate all property to pay off assets. After this filing, there may be little remaining to build a business on. While the company typically folds, creditors only receive a fraction of what they’re owed.
- Chapter 13 Bankruptcy—Chapter 13 bankruptcy gives you more flexibility and often allows you to resume normal business operations. Usually, a bankruptcy court will arrange a payment plan over a specific time period. The goal is to eventually pay the debt in full.
What to Know About the Corporate Bankruptcy Process
The corporate bankruptcy process is complex, no matter which type you choose. Before filing, it’s a good idea to understand what the process looks like. While every situation is different, proceedings generally follow these steps:
- Meet With a Licensed Insolvency Trustee—Working with a Licensed Insolvency Trustee is essential to success. During your initial meeting, you’ll discuss your average revenue and profits, who you owe money to, the amount of debt, and whether personal guarantees are in play.
- Sign the Corporate Bankruptcy Documents—Next, you’ll sign official bankruptcy documents. Then, your Trustee takes steps to register these documents with the relevant institutions. At this point, creditors can no longer pursue you for debt payments.
- Attend a Meeting of Your Creditors—With the documents taken care of, you’ll now attend a meeting of your creditors scheduled by your Trustee. It usually occurs within three weeks of the bankruptcy proceedings and allows the creditors voting power over some future decisions.
- Provide Relevant Information—Throughout the process, you will be required to turn over all relevant documents to your Trustee. For example, at J. Bottom & Associates, you’ll need to provide information about any assets you might sell under the bankruptcy.
- Apply for Discharge—Once you have fulfilled all your obligations, you can apply for discharge, or release. The discharge usually includes mandates on asset forfeiture and other crucial details that you’ll go over with your Trustee. If granted, this action effectively closes the case.
The Causes of Corporate Bankruptcy
Sometimes, the most important step in the corporate bankruptcy process is realizing that filing is the logical next step. Knowing the causes of corporate bankruptcy is the best way to recognize them in your own company. While financial issues can stem from any number of reasons, these are the most common problems that lead to bankruptcy:
- Poor management decisions
- Inefficient operations
- Inadequate financial planning
- Excessive borrowing
- Risky investments
- Economic downturns
- External factors like market competition or supply chain disruptions
Contact Us Today for Corporate Debt Solutions
The cost of corporate bankruptcy is more than just financial, but ultimately, it can lead to your business making a full recovery. At J. Bottom & Associates, we know you worked hard to grow your business, and we don’t want to see years of effort sent down the drain. Together, we can help you develop a solution to get your company back on track. With years of experience under our belts, we’ll walk through the filing process and answer your questions along the way. If you think your British Columbia company needs to declare bankruptcy, contact our team today.