Business owners work very hard to find success. Of course, owning a business is no easy task and sometimes, when debts start to pile up, bankruptcy may be the best option. There are two different types of bankruptcy that businesses have the opportunity to explore, Chapter 7 and Chapter 11. Of course, it is important for a business owner to do their research to determine which type of bankruptcy is best for the business.
A Chapter 7 bankruptcy is best for the businesses that have more debts than assets. Unfortunately, a Chapter 7 bankruptcy typically results in the business shutting down. However, it does allow the business owner to walk away with a clean slate because they are able to liquidate the business’ assets to put towards the debt.
Chapter 11 business bankruptcy is a better option for businesses that have the potential for profit. This option allows the business to get rid of overhead costs and come up with a debt repayment plan that will last for five years. Chapter 11 bankruptcy allows a business to keep its doors open and continue allowing staff to work while determining a way to pay off debts.
If you have a question about business bankruptcy, contact our firm today.
Our firm understands that so much of your future is on the line in matters of divorce, family law, bankruptcy, and estate planning. Before taking any sort of legal action, it is important to discuss your legal matter with an experienced attorney. Contact The Radol Law Firm to discuss any divorce and family law matters you may be faced with.