Are there ways to avoid bankruptcy?
February 5, 2023 | 40,00 EUR | answered by Katja Winterberg
Dear bankruptcy attorney,
My name is Fanni Lehmann and I am currently facing the difficult situation that my company is experiencing financial problems and may be heading towards bankruptcy. As the owner of a small retail business, I have seen significant declines in revenue in recent months, which now means that I can no longer cover my ongoing costs. This has put me in a precarious situation, as I fear that I may have to file for bankruptcy.
My biggest concern is that my company may have to close completely due to bankruptcy, and I could lose my livelihood as a result. I have worked hard for my business and it would be very painful for me to see everything I have built now at risk of being lost. Therefore, I am wondering if there are any ways to avoid bankruptcy and save my company.
I have thought about whether it would be sensible, for example, to negotiate with my creditors or if there are alternative financing options to improve my liquidity. I am also interested in possible restructuring plans or other legal steps that could help me avoid bankruptcy.
I would be very grateful if you could provide me with some advice in my current situation on how I can protect my company from bankruptcy. What measures could help me overcome the financial crisis and get my company back on track?
Thank you in advance for your help and support.
Sincerely,
Fanni Lehmann
Dear Mrs. Lehmann,
First of all, I would like to express my sympathy for the difficult situation you are currently facing. The possibility of insolvency is a frightening prospect for any entrepreneur, especially considering the amount of work and passion that goes into starting and building your own business.
It is understandable that you are determined to save your company and avoid insolvency. In such a situation, it is important to remain calm and seek professional advice. As a lawyer specializing in insolvency law, I can show you some possible steps that could help you save your company.
Firstly, it is important that you conduct a thorough analysis of the financial situation of your company. Review your income and expenses, as well as your liabilities and receivables. This will help you get an overview of your financial situation and identify possible courses of action.
One initial step could be to negotiate with your creditors. Be open with them about your financial situation and try to find common solutions. You may be able to reach payment agreements with your creditors or arrange for a payment extension. Often, creditors are interested in avoiding insolvency, as they would also suffer losses in this case.
Furthermore, you should consider if there are alternative financing options to improve your liquidity. This could be done through taking out a loan, attracting investors, or applying for government funding. Increasing liquidity could help you cover your ongoing costs and get your business back on track.
Another important step could be the creation of a restructuring plan. In such a plan, you outline measures aimed at restructuring your company and making it economically successful again. This could include optimizing business processes, reducing costs, or exploring new business areas.
In addition, there are legal steps that could help you avoid insolvency. This includes, for example, the possibility of an out-of-court settlement with your creditors or applying for insolvency proceedings with self-administration. In such a procedure, you retain control of your company and have the opportunity to implement a restructuring plan.
In conclusion, I would like to emphasize the importance of seeking professional advice early in your situation. An experienced insolvency lawyer can help you take the right steps and protect your company from insolvency. Do not hesitate to contact me for further individual consultation.
I wish you success and am available to support you in this difficult situation.
Best regards,
Katja Winterberg
