BUSINESS Chapter 7
Chapter 7 is the same as personal bankruptcy as it for the business. Filing Chapter 7 you will lose control of your company as the trustee takes over all the business assets and will determine was is in the best interests of the creditors. You have will have no control over what is going to happen. If you have any debt that is owned by you, you may also be held reliable.
Most business that has no viable future, meaning doors will not stay open, this is the best option. This can apply to any form of business. It is also appropriate when there are no substantial assets. Chapter 7 even as a business owner you still will need to take the mean test to make sure income is over a certain limit. If Chapter 7 is approved, assets will be sold, and business will be dissolved. In a business Chapter 7, the court does appoint a trustee to make sure assets are sold and the creditor is paid back. Once the funds are distributed the case is discharged.
If you are a sole proprietor you are responsible for all its debts, both personal and business will need to be included in the filing. You also may not be able to discharge all debt, which is considered no dischargeable debts. You may want to consider this if you a lot of debts and little assets.
If you are a partnership it normally not popular as the bankruptcy does not discharge the business debt, making the partnership liable to repay it. Also, the trustee can pursue each partner personally to cover the business debts. As a partnership, facing bankruptcy, you may want to pursue it as individuals, rather than a business.
If you are a corporation you may to this if you are going to close the business. The trustee will sell off the assets owned by the corporation to cover all the debt. There is open transparency with the trustee and creditors on what the assets are to be sold, which insures the creditors will be treated fairly.