Chapter 7 Bankruptcy for Small Businesses

Chapter 7 Bankruptcy for Corporations and LLCs

Filing for business bankruptcy means someone else steps in to liquidate your business’s assets and settle its debts (in this case, the bankruptcy trustee).

Will You Have to Close Your Business if You File for Personal Bankruptcy?

You may have to shut your business down if you file for Chapter 7 personal bankruptcy. However, if you own an LLC or corporation with others, you may be able to keep your doors open, even if you are personally liable for a significant portion of its debt.

Chapter 7 Bankruptcy for Partnerships

A partnership is allowed to file for Chapter 7 bankruptcy. However, depending on the type of partnership and the value of the partnership assets, filing for Chapter 7 may not be a good solution for the partners. In fact, there are several big reasons why Chapter 7 is often not helpful to partnerships.

Overview of Bankruptcy Options for Your Struggling Business During the Coronavirus

Each bankruptcy chapter offers unique benefits that will differ depending on whether you or your company files for bankruptcy. Understanding these dynamics will help you choose the best solution for your small business needs during the coronavirus pandemic.