Owning a business is no easy task. When debt starts to pile up and a business begins to struggle, the owner may not know what to do. While it can be a difficult decision to make, filing for bankruptcy can allow the business owner to get rid of their debt. Business owners have two options when it comes to filing bankruptcy. They can file either Chapter 7 or Chapter 11 bankruptcy, depending on which option best fits their business’ financial situation.

Chapter 7 Business Bankruptcy

Chapter 7 business bankruptcy, much like Chapter 7 consumer bankruptcy, is the option that allows the business owner to liquidate their debts and walk away without these burdens. It is important to note that Chapter 7 business bankruptcy often results in the business actually shutting down. This option is typically best for businesses that have more debts than assets with very little chance to actually make a profit. If restructuring the business’ debt is not a practical option, Chapter 7 bankruptcy may be a great option.

Chapter 11 Business Bankruptcy

The other option for business bankruptcy is Chapter 11 bankruptcy. This is a great option for businesses that do still have valuable assets. This can allow the business to keep its doors open and continue to bring in money while they renegotiate their debt. Many large businesses choose this option so they can get rid of overhead costs and move forward as a successful business.

If you have questions about business bankruptcy, contact our firm today.

For strong legal representation from an experienced personal injury, bankruptcy, workers’ compensation, criminal defense, or family law attorney, contact Underwood & Micklin and we would be happy to schedule a consultation to discuss your matter.