The past few years have been far from easy for most of the Americans out there (be them individuals or business owners) and while things have slowly started changing, the truth is that there are still many of them out there struggling with finances and with making ends meet. If you are a business owner and if you consider that managing debt has become impossible due to its high value, then read on.
According to the United States law, you can choose to file for bankruptcy as long as you provide the court with proof for the fact that you are unable to pay your debt. There are six types of bankruptcy out there and one of the most popular choices is the Chapter 7 one, which can be applied both to individuals and to companies as well.
While the basics of Chapter 7 are the same for individuals and for businesses at the same time, there may be certain things you will want to know about filing under this chapter as a business owner. For starters, you should know that all the assets related to your company will be administered by a Trustee once the bankruptcy trial has ended. The trustee may choose to continue running the business or he/she may choose to close it down. Furthermore, when selling parts of the business (even entire divisions can be sold to other companies), your current employees may lose their jobs (although in some cases they may be able to keep them).
Another very important thing you will want to know if you want to file for bankruptcy under the Chapter 7 law is related to the fact that you cannot receive bankruptcy discharge. Furthermore, any type of secured loan (including mortgages) will be considered separately and it will not be affected by the decision of declaring bankruptcy (thus, the lenders that have given you secured loans will not have a share in what the trustee will sell from your company).
The laws behind bankruptcy in general can be quite complex and in some cases they may even vary from one state to another. When it comes to businesses, everything can get even more complicated and this is why choosing a great bankruptcy lawyer is more than important (as a matter of fact, as a business filing for bankruptcy you cannot even choose to represent yourself, such as in the case of the individuals doing the same thing).