Commercial bankruptcy and the proposal are both solutions to debt. The proposal even allows you to release your business from your creditors. However, each has specific characteristics and is better suited to certain situations.
Proposal
The proposal consists of negotiating with your creditors to reduce the amount of your debts and/or extend your repayment period. This agreement will be made by a licensed insolvency trustee such as those at Raymond Chabot. This expert has the necessary skills to help you and be with you every step along the way.
There are numerous advantages to a proposal. In particular, it allows your business to continue operating and, therefore, to :
- Keep jobs ;
- Keep your property ;
- Act quickly so your clients don’t change supplier ;
- Get enough time to initiate a financial reorganization.
In addition, under a proposal it may be possible to terminate commercial leases and contracts that are too costly. In some cases, it also releases the business from its responsibility for unpaid government debts.
Commercial bankruptcy
Bankruptcy, like a proposal, allows you to put an end to any recourse initiated by creditors against your company.
Unlike the case with a proposal, all of the business’s activities are terminated. The licensed insolvency trustee is required to :
- Liquidate your assets to repay your creditors ;
- Close the business permanently ;
- Remove the business from the register of companies.
This is why bankruptcy is considered a last resort. If you know that your business cannot be made profitable again despite corrective measures, this procedure may be the right choice for you. It will put an end to all your financial worries and give you peace of mind. To find out more, go to our web page on commercial bankruptcy.
