How to Recover From Business Insolvency

business insolvencyRecovering from business insolvency can be a difficult task. Most businesses can suffer from insolvency at some point in their businesses’ lifetime and it can be a true test of a business to steer through this difficult time by making the correct decisions. But before we dive into the topic of recovery from insolvency, you need to have an understanding of what insolvency is, and what it means for your business.

Insolvency is simply defined as a business or an individual’s inability to pay their debts to their creditors when the debts fall due. This is a clear sign that the business isn’t doing what it’s supposed to: make profits. When there is insolvency, money is being lost. When there is loss of money, your business is in trouble.

While insolvency doesn’t necessarily always lead to business liquidation, it certainly could be the outcome. If your business is just starting out, it may not be a surprise to find that your net assets are less than your liabilities.