Chapter 7 Bankruptcy for Small Businesses

Corporations, limited liability companies, and partnerships are allowed to file a chapter 7 bankruptcy petition. Like individuals, business entities receive protection from creditors in bankruptcy. However, a chapter 7 bankruptcy provides a limited benefit to business debtors. Individual chapter 7 filers can keep a certain amount of property that they own. However, businesses that file bankruptcy cannot keep anything. A chapter 7 trustee will sell all of the business property and distribute any proceeds to the creditors. The chapter 7 trustee also has the right to operate the business until all of its assets are liquidated. Therefore, a chapter 7 bankruptcy would not be the best option for a business owner who wants to maintain control of the business. Generally, a business chapter 7 bankruptcy should only be considered if the business is going to close. That's because businesses don't receive a discharge or cancellation of debt in a chapter 7. Even after the trustee takes all of the businesses property, the business still technically owes money to its creditors. Nonetheless, if the business closes and there are no more assets, the creditors won't be able to be paid additional money anyway.

Read more detail on Recent Bankruptcy Posts –

Legal notice about the Chapter 7 Bankruptcy for Small Businesses rubric : Hukuki Net Legal News is not responsible for the privacy statements or other content from Web sites outside of the Hukuki.net site. Please refer the progenitor link to check the legal entity of this resource hereinabove.

Do you need High Quality Legal documents or forms related to Chapter 7 Bankruptcy for Small Businesses?

This entry was posted in Bankruptcy Law and tagged , , , . Bookmark the permalink.

Leave a Reply