Stress Tests and Other Distractions
One of the most powerful curative effects of Chapter 11 Bankruptcy is breathing room. It is the ability of the decision makers in a small business to take their minds off of hunting for money and ducking creditors and vendors and instead lets them focus their attention on how they got into financial difficulty and what needs to change in order for them to continue in the future without losing their business.
Stress test results are always momentous because they prompt banking institutions to examine and think about their portfolios. In other words, it makes them more aware of who owes them money and what measures they may need to take in order to insure their continued operations.
Small business owners are often surprised to learn that the Vice President, or Bank Manager who has been their “friend for years” and who “understands their business” is suddenly no longer friendly or understanding. When economic climates change, Banks have a duty to protect depositors and shareholders and so their attitudes have to change as well.
It is important to remember that your “friend” the banker is not out to do you a favor (such things disappeared in the late 1980s when Bankers went to prison for doing favors). When Bankers are stressed their sole mission is to improve their position, not yours. Before you take any action in response to a Bank expressing concern about your company’s accounts, it is wise to have the advice of an experienced Business Bankruptcy specialist. In Texas you can use this link to find a specialist in your area: https://www.tbls.org/findlawyer. Don’t let the stress of the moment impair your ability to successfully reorganize your business.
This article is written by an attorney at Attorney Donald Wyatt PC. Always consult an attorney before making any legal decisions. To make an appointment today, please click here to contact us.