Sometimes a business venture just does not work out, leaving business owners struggling with unending debt. If your business has reached a point of financial failure, it may be time to file for a Chapter 7 bankruptcy. This legal option is best for businesses that are no longer able to generate enough income to cover their debts. This, however, will require you to liquidate all of your business assets to pay your business debts. Before going this route, it would be in your best interest to consult an experienced business bankruptcy attorney who specializes in Chapter 7 bankruptcy.
Sole proprietors’ cases can be different from LLCs and corporations when it comes to erasing debts. If you are a sole proprietor in Boca Raton, West Palm Beach, Fort Lauderdale or anywhere in South Florida, filing for Chapter 7 personal bankruptcy could discharge the majority of your personal and business debts. LLCs and corporations, however, are separate entities from the business owners; in this case, filing for Chapter 7 bankruptcy must be carried out as a business. There is no discharging of debts in this case, and the company ceases operations so that its assets can be liquidated by the trustee for the benefit of the creditors. The good news is that Chapter 7 business bankruptcy protects the owners, thus avoiding repossession or liquidation of personal assets.
Chapter 7 bankruptcy is not the way to go if you want to continue operating your business, especially if your business is an LLC or a corporation. However, if you are a sole proprietor, you can choose to file for a personal Chapter 7 bankruptcy to discharge your personal and business debts, while seeking available exemptions for certain assets. This will essentially let you continue operations after filing for bankruptcy. To know the best option for you, get a free evaluation from our team of experienced Chapter 7 business bankruptcy lawyers.
Christian and Lisa McCue are law graduates of the Nova Southeastern University, with over forty years of combined experience in handling legal affairs of others, especially in the most difficult areas of finance: Personal bankruptcies, mortgages, foreclosures, and corporate liquidation.
As a married couple, we understand the challenges that financial hardship can present for families. We focus on providing not only competent legal support, but also on helping you manage the emotional upheaval by taking the bulk of the burden off your shoulders.Read More About Christian and Lisa McCue
Businesses who cannot generate enough profit to pay for their debts are the ones who usually file for Chapter 7 bankruptcy. The process liquidates the assets of the company to be distributed to its creditors.
Yes! Filing for bankruptcy as a business will require you to liquidate the assets of the company through a trustee. If you are a sole proprietor, however, you may be able to file for Chapter 7 as a person instead of a business. This will allow you to discharge debts and protect certain business assets through some exemptions.
Unless you are a sole proprietor, filing for Chapter 7 will lead to the closure of your business. . It is also for your protection as filing for Chapter 7 as a business only liquidates assets of the business and not your personal possessions. If you want to continue your business, you may have to seek other options like Chapter 11.
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