There are so many different forms of bankruptcy, and it can be difficult to know which type is right for your business, should you be facing a dire situation. While no article can replace the counsel of a professional lawyer, you can do research on your own in order to educate yourself about your options. If you find your business facing bankruptcy, Chapter 7 might be for you.
Business Chapter 7: The Details
Business Chapter 7 is a form of liquidation bankruptcy. While many larger corporations might file Chapter 11 bankruptcy and restructure, the process can be an expensive route with lots of court time. Because of the fees and headaches associated with Chapter 11 bankruptcy, many small business owners opt for Chapter 7 when forced to make the choice.
Business Chapter 7 is most likely the right choice for you if your business has to declare bankruptcy. Under Chapter 7, your remaining assets will be liquidated and distributed amongst your creditors in order to repay them as much as possible.
It’s important to note that your business won’t be discharged; rather, it will be dissolved. There is a significant difference here. Only individuals can receive bankruptcy discharge. When your company is dissolved, all of the remaining assets and property undergoes the liquidation process. Of course, your company ceases to exist after dissolution. All partnerships are formerly broken and rendered non-existent.