If you’ve hit a tough spot financially with your business, you may wonder whether it’s better to restructure your debt or file bankruptcy and start all over again. The choice is a difficult one, and one that must be approached by carefully considering all sides to ensure you make the right choice. To aid you in your choice, you need an experienced valuation firm that offers solutions in regards to bankruptcy and restructuring services for companies just like yours. Which option is better for you and your business is a complicated question. Here is a quick overview of the features of restructuring and chapter filing that could help you decide.

What Are Your Options?

You have two options at your disposal: bankruptcy or debt restructuring. Bankruptcy is the legal process by which you declare your inability to pay your debt and liabilities. This is an option for those who can’t pay their creditors any longer and want to seek a fresh start through liquidation of assets and reorganization, according to United States Courts. There are three main chapters as part of the country’s bankruptcy code: Chapters 7, 11 and 13. For our purposes, we’ll be talking mainly about Chapters 7 and 11, as Chapter 13 applies only to individuals.

Chapter 7—also referred to as liquidation bankruptcy—is where all the filer’s assets are liquidated to pay off creditors. Chapter 11 is the name for the reorganization portion of the bankruptcy process. When filing under Chapter 11, businesses may continue to operate, but they must pay off their creditors at the same time through a reorganization plan approved by the courts. This option allows a business to carry on its name and forge through the financial downturn. Filing under Chapter 7, on the other hand, in essence disbands the organization.

Aside from chapter filing, your business’s other option is restructuring its debts out of court. The advantage of restructuring outside the court is that your business could end up paying less money than it would if you choose the Chapter filing option. Plus, if you remain on good terms with your creditors, you may get more flexibility in the control of your company. Settlement is decided without heading into the courts, with terms agreed upon by both the debtor and the creditors.

What’s Best for You?

The best solution for your business will depend on your unique situation, how much your business owes and how far you’re willing to go to retain the value and good name of your company. Most entities facing financial downturns will first try out-of-court debt restructuring and attempt to negotiate with creditors. Restructuring is your last chance to resolve your business’s debts before filing for bankruptcy. Do all you can to negotiate terms with your major vendors, even if you have to pay them a smaller percentage of what you owe up front. Many vendors will be amenable to this; they’d rather be paid a small amount from you now than an even smaller percentage in bankruptcy court later, says Entrepreneur.

The restructuring process doesn’t always go smoothly, though, and it can be very difficult to reach an understanding with creditors. If your business can’t negotiate a deal with its creditors, you may have to move on to the bankruptcy stage. Chapter 7 may be wise if your business lacks enough substantial assets to ensure a future, according to the Small Business Association. Chapter 11 might be the way to go if your company indeed has a future, but reorganization bankruptcy must take place in front of a creditors’ committee made up of the seven biggest unsecured debts against you. This is a court-approved process, as opposed to out-of-court restructuring, and may be met with more success due to the supervisory aspect.

Whether you decide to chapter file for bankruptcy or try to restructure your debt outside of court, you’ll need someone on your side who’s highly experienced in valuing both tangible and intangible assets, litigation support and transactional processes. Whatever you decide, don’t do it without an expert at your side to weigh the pros and cons of each option.