For many contractors, finding a way to restructure debt is preferable to declaring bankruptcy. For starters, perhaps ironically, filing for bankruptcy is expensive. Between filing costs and attorneys’ fees, the process can end up costing you thousands of dollars.
Plus, bankruptcy proceedings can be enormously time-consuming, typically involving lengthy negotiations with bankers, creditors, vendors and tax authorities. And even after working with your attorney and attending court dates, your creditors may still be able to appoint a representative to lead the court-appointed restructuring of your construction company — essentially taking over your business operations.
Most importantly, the bankruptcy process doesn’t force you to examine what business practices landed you there in the first place. It treats the symptoms, not the disease. Alternatively, undertaking a sound, comprehensive debt restructuring program with your financial advisor can allow you to devise long-term, beneficial solutions to your money problems.