It can be challenging to run a business with all tough competitions. In such situations, even the best entrepreneurs face financial crises. Corporate bankruptcy can be extremely tough. But it is a necessary choice if your organization is drowning in debt. You can rest assured because we are here to help you. It is time to understand the process mentioned in the guide before making your decision.

Thus, let us go through the points listed below to figure out the course of corporate bankruptcy in Kelowna BC.

[1] The Corporate Bankruptcy Breakdown - A Step-by-Step Guide

As you have already decided on bankruptcy. Here is what you can expect further -

[a] Choose Your Path: Canada offers two main types of corporate bankruptcy -

[i] Voluntary Assignment:  Your company files for bankruptcy. And then hands control of its assets to a Licensed Insolvency Trustee - LIT.  They are like a saviour in such situations.

[ii] Creditor-Initiated Bankruptcy: A creditor files a petition against your company to force bankruptcy Kelowna.

[b] Find Your LIT

An LIT is a pro who will guide you through bankruptcy. So, you must choose someone with experience in your industry. Plus, they should have a good track record.

[c] File the Paperwork

Your LIT will help you document the necessary things with the Office of the Superintendent of Bankruptcy - OSB. This way, the process will start officially.

[d] Creditor Meeting

A conference will be held where your LIT will explain the situation to your creditors. They will also discuss your finances with them.

[e] Asset Check-Up

The LIT will take control of your company's assets and figure out their value. This will help them to determine how much money is available to repay creditors.

[f] The Offer

Your LIT will develop a proposal outlining. It would be explained in detail how creditors will be repaid with the available assets. And the creditors will vote on this proposal.

[g] Possible Outcomes

[i] Proposal Approved: Bankruptcy in Kelowna is complete if creditors approve the plan. Your company might even continue operating under a restructured debt plan.

[ii] Proposal Rejected: The LIT will sell your company's assets if creditors reject the plan. And they will distribute the funds to creditors based on a set order.

[2] Beyond the Basics - Important Stuff to Know

[a] Impact on Directors and Shareholders: Directors and shareholders typically lose control of the company during bankruptcy.

[b] Taxes and Bankruptcy: There can be tax implications associated with bankruptcy. So, you should talk to a tax professional to understand the potential tax effects.

Ending Note

Corporate bankruptcy Kelowna does not need to be the end. It can be an opportunity to fix your finances and dispose of the unmanageable debt. Plus, this will help you to come back stronger. You can go through this challenging time with confidence by understanding the process and getting professional help. This will even help you to potentially pave the way for a brighter future for your company.

Shane Taylor is the author of this article. To know more about Financial counseling and debt management services please visit our website: debtfreebc.ca