The CNNpolitics website recently posted the dismaying news that under the Trump administration, a deficit of $2 trillion is to be cut off from the US citizens’ taxes. Many would say, Trump failed to surpass nor realize his promise of eliminating this enormous concern of the US citizens; or that some would say, ‘The nation’s never been better.” To the person reading this, you may be a taxpayer, one of those gravely disappointed with such news, but aside from worrying about your tax, should you not be worrying about the possible occurrence of a ‘bankruptcy’ in your life, then? In this article, we would like to present you a brief knowledge about bankruptcy and how could it intensify your ordeals as to your financial stability. Of course, we will also give you some tips and go-tos in emergencies like this.
Bankruptcy is the legal declaration of inability or impairment either of an individual or an organization to pay its creditors, leading to settlement in a bankruptcy court. Two (2) types of bankruptcy are: Voluntary bankruptcy or the bankruptcy initiated by the debtor that is filed by the insolvent individual or organization; and Involuntary bankruptcy or a plea that may not be filed against an individual debtor who is not involved in business (Sil, P., 2010). Popularly, bankruptcy is also classified into: Chapter 7 Bankruptcy that contains measures to be followed when settling a firm that has failed, and Chapter 11 Bankruptcy which summarizes the processes for reorganizing a firm. Above all these technicalities, what is its connection to your taxes? Well, let us limit the scope of discussing taxes in the State of California, wherein if you are currently active in your computers, there are a variety of ways on how you can pay for your taxes and avoid any debts as a taxpayer. Such that the State of California has solely made an office and website for Franchise tax board, covering Business entities’ payments(https://www.ftb.ca.gov/), and California tax service center, this tackles more on the Personal Income Tax catering Income Tax, Payroll tax, Sales and use tax, and Other taxes and fees(https://www.taxes.ca.gov/). Basically, these are all compulsory payments to the government by its citizens/taxpayers, for the production, ongoing, and flourishing of government projects and programs for all. That you, as a taxpayer, must be aware of your duties for receiving the government’s protection and services. Your delay or hesitance from paying your annual dues would pile up and cost you more than you would expect, as the tax collectors legally put interests in it in order to redeem the financial lapses or debts against the government. This brings more misfortune to those in either small or huge businesses for it has a greater value or financial assets in it than those from personal or individual income of people.
So, how should you (if you are in a business) take-on the threat of bankruptcy?
According to Mark Streshinsky, a certified non-debt blogger and traveler, and rich man, there are these four (4) essential things to consider when starting-up a business or maintaining one:
- Budget is Your Constitution.
Create your detailed budget, with all of your business’ intricate details, and stick to it. Money should be allocated according to your budgetary need, and a big no-no to stray from your plan. Those who stray away from the plan tend to fail, for there is no more system being followed. Though, there will be inevitable costs, make sure to have your contingency plan/Plan B when everything goes wrong with your budget.
- Consider Incentivizing Early Payment.
Cash flow is an extreme importance to any business. One of the effective ways of ensuring prompt payment is to incentivize early payers. Consider working a small percentage discount into client contracts for early payment. And if this doesn’t work…
- Find the Right Commercial Collection Agency.
Have another protector of your money, aside from yours truly. A trusted and dignified collection agency. Though be very weary of certain collection agencies which may give a bad rap at your business or alienate your clients for its unlikely reputation towards clients.
Another thing would be, to secure a dignified and respectable legal counsel when it comes to your financial concerns. Since we are talking about California, if you are around 337 N Vineyard Ave, Suite 100, Ontario, CA you will find LG Law ready to serve you or your business from overcoming your bankruptcy problems or threats, upholding your utmost cause and status.
- Keep Your Financial Activity Organized, and Hire an Accountant or Bankruptcy lawyer When Ready.
At the very lest, this part is easy. You must hire an accounting expert specializing in startups or finances(of course). Since, startups have relatively little financial activity to track at the beginning, so keeping things organized should not be hard. You will know that you need to hire an accountant if your business has grown big and needs helping with tracking your cash flow.
Another thing would be, to secure a dignified and respectable legal counsel or bankruptcy lawyer when it comes to your financial concerns. Since we are talking about California, if you are around 337 N Vineyard Ave Suite 100, Ontario, CA 91764, USA., you will find the LG Bankruptcy Law Firm ready to serve you or your business from overcoming your bankruptcy problems or threats, upholding your utmost cause and status.
Hence, we are hoping that this article and simple tips, you should be able to maintain a robust cash flow and avoid any threats of future debt or bankruptcy, in order to maintain a harmonious and glorious business or financial stability.