There are a few key facts that you should know about a Chapter 7 bankruptcy so that you may get the most out of it.
Business and individual
People can file a Chapter 7 bankruptcy for personal purposes, or for their businesses. Therefore, the type of business is an important consideration when determining how to file. For a sole proprietorship, the business and business owner are one, so a personal filing covers the individual and business. On the other hand, a limited liability company separates the person and business, so to dissolve all responsibility to the company, the owner would have to file a personal and business bankruptcy.
The different bankruptcy types have their own set requirements. Before embarking upon the filing process, it would be beneficial to review the federal bankruptcy rules and procedures, to ensure that you may qualify. Otherwise, you could waste a good amount of time and receive a denial. You should note that if you file for Chapter 7, all of your business’s assets will be liquidated, and your creditors will receive those proceeds.
A major benefit of a Chapter 7 bankruptcy is that it can eliminate all ties to the business. This not only helps to remove the stress of financial debt, but it also gives you the ability to start over. Whether you desire to blaze a new path, take a job with a company that is within your career field, or pursue other entrepreneurial opportunities, you have that option with this bankruptcy type. The flexibility this offers makes it quite attractive to a number of people.
If you are considering filing, speak with a bankruptcy attorney to learn the pertinent details and select the best path for you.