Can My Business File Bankruptcy?
A San Francisco bankruptcy attorney addresses: Can My Business File Bankruptcy?
Can a business file bankruptcy?
Yes. The bankruptcy code provides relief not just for individuals and couples but also for businesses. Business can file under either chapter 7 or chapter 11, depending on what the goals of the business are. Filing under chapter 7 generally means that the business wants to liquidate whatever assets it has and close its doors, while filing under chapter 11 allows the business to remain open and continue its operations.
Which chapter is better?
That generally depends on what the goals of the business are. Often individuals who own businesses want to cease operations and have bankruptcy end all outstanding obligations. In that case a chapter 7 filing would be best suited to achieve those goals. It is important to understand that sometimes a personal bankruptcy is needed in order to extinguish all liability, as many smaller business loans and lines of credit are personally guaranteed and the only way to completely remove all obligation to pay is to file personally and include all business debts. If the business would like to remain open and simply reorganize its economic structure, then a chapter 11 filing is better tailored to meet those goals.
Does a business filing under chapter 7 receive a discharge?
No. A business does not receive a discharge in bankruptcy. Instead, its debts are written off and the business ceases doing business in the state. If the debts are not personally tied to anyone then the outstanding loans die with the business.
What about sole proprietorships?
A sole proprietorship is essentially an extension of the individual who started the business, therefore making all debts of the business debts of the individual. In those cases it is best for the individual to file a personal bankruptcy in order to be relieved of any obligation to pay the debts.
If you have questions regarding bankruptcy in San Francisco or bankruptcy in the greater Bay Area please contact our San Francisco Bankruptcy Attorneys at (415) 946-8882 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Francisco Bankruptcy Attorneys. After you have spoken with one of our Bay Area bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Francisco and Bay Area consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco Bay Area!
