There are two basic kinds of business bankruptcy in the United States bankruptcy system. The U.S. system is divided into different models of bankruptcy; each type of bankruptcy is called a chapter. The most common types of bankruptcy for businesses are chapter 7 and chapter 11. Chapter 7 usually means the business is over. Chapter 11 is usually for reorganizing your business. Business bankruptcy lawyers can help you with either kind of business bankruptcy.
Chapter 7
Chapter 7 bankruptcy is often called liquidation bankruptcy; this is the type of bankruptcy you will file when the business is most likely over. Instead of reorganizing or resorting to some other solution, you will sell as much of the business as you possibly can and relinquish ownership. You can fold the business and sell off the assets or just sell the entire business to be handled by someone else. Whichever direction your business bankruptcy lawyers recommend, you will no longer have a functional business at the end of it all. This is a very drastic type of bankruptcy. Some businesses actually come back under new names or new contracts after chapter 7, but it is a very drastic step.
An attorney such as Fred Wehrwin, P.C. will help you decide if chapter 7 is right for you. If it is the right choice, you will have a good partner in the sale. Alternately, the choice might be chapter 11.
Chapter 11
Chapter 11 bankruptcy is often called reorganization. You will not sell the entire business. Instead, you’ll sell off some assets, reorganize other assets, and try to rearrange your debt to be more manageable. Oftentimes, your business will be placed in the hands of a steward who will handle the sale and reorganization of your assets. Depending on the business and on the bank, you could even be the steward of your own business’s reorganization. A good lawyer will help you argue what is best for your business. You can also connect them on Facebook.
