How to recognize that you’re in bankruptcy
In general, companies or institutions that do not have the ability to pay debts contracted for some reason and not continue with payment, arrive at a state of bankruptcy. In several cases, a situation of this kind is reason enough for closing a business, and start fresh with the company. With respect to persons who have the responsibility to pay the debts, they are forced to do anything to get money from the debt cancellation, wasting time and increasing delinquencies. Let’s look at 8 points that will help you identify if you are in a Bankruptcy.
1. Reducing the number of workers
This aims to have less expenses in your budget. Companies take this drastic decision to make staff cuts.
2. Late payment agreements
A great sign of being in a Bankruptcy, you’ll begin to notice when you’re late in paying responsibilities, including payment to workers of a business.
3. Close departments of your business
In this case, after a thorough assessment, you look at the obligation to the closure of one or more departments of your business. These should be activities that have less relevance in the company.
4. Disorders in finance
This happens when you start looking for new loans to get out of the situation.
5. Cutting cheaper raw material purchases
This is another sign of entering a Bankruptcy. Looking for lower prices because the economy does not allow you to pay higher prices, both in the production and distribution of raw materials. Here the risk is always hard to put into play the quality of the products.
6. Not counting on cash flow
Cases are presented in which the sales of some of the assets mortgaged as the case of buildings, grounds in order to improve the active flow of the box.
7. Difficulty in accessing credit
This as a result of non-payment of bank borrowings.
8. Drop in production of a company
This situation leads to the creation of a barrier to entry to new markets, limiting the growth of the company.