Does your business have so much debt that you are considering closing operations? Liquidating a business to pay debts can be a difficult process, but the law makes it simpler if you choose to file for a Chapter 7 bankruptcy for your business. To discuss your options for your business debts, consult an Edison Chapter 7 business bankruptcy lawyer at Gillman Capone. Our experienced business bankruptcy attorneys can determine the proper path and guide your company through the process.
Chapter 7 bankruptcy, often called “liquidation bankruptcy,” is a legal process that allows individuals or businesses to address overwhelming debt. The process can be different for consumers than for business owners, depending on the specific business entity you have. In either case, having an Edison attorney with experience in Chapter 7 business bankruptcies from the very start of the process can ensure a successful outcome.
A Chapter 7 business bankruptcy is available to most business entities that are no longer able to pay their debts and wish to cease operations. This includes:
Unlike individual Chapter 7 cases, businesses do not need to pass a means-test to qualify. However, the business must be insolvent, meaning its debts exceed its assets, or it cannot pay bills as they come due.
Sole proprietors are unique because they can file a personal Chapter 7 bankruptcy to cover both personal and business debts. Sole proprietorships are not separate legal entities from owners, so all the personal and business debts can be combined into one case, and most debts can be potentially discharged at the end of the case.
Corporations, partnerships, and LLCs are different. With the help of an Edison lawyer, these entities will file for a Chapter 7 bankruptcy strictly as a business, but they are not eligible to receive a discharge of debts. Instead, the bankruptcy process focuses on liquidating and closing the business. The liquidated assets can then go toward the outstanding debts.
Businesses looking to restructure or continue operating may need to consider Chapter 11 instead, and our attorneys can identify the best path for your company.
A Chapter 7 bankruptcy involves the complete liquidation of a company that can no longer meet its obligations. The process begins by filing a bankruptcy petition with the court, along with detailed financial documents outlining:
Once filed, an automatic stay goes into effect, halting most collection actions against the business.
The court then appoints a bankruptcy trustee to take legal control of the business’s non-exempt assets, liquidate them, and distribute the proceeds to creditors according to the Bankruptcy Code’s “priority” rules. Unlike personal Chapter 7 cases, a business does not receive a discharge—rather, the bankruptcy dissolves it.
Owners, especially in sole proprietorships or partnerships, may still have personal liability for certain debts. It is essential to consult a Chapter 7 business bankruptcy attorney in Edison to ensure compliance and explore potential personal protections or alternatives.
Our firm can guide you through every step of the process, ensuring your paperwork is accurate and filed correctly. We help you determine eligibility, protect as many assets as possible using exemptions, and represent you at the creditors’ meeting. We can also handle communication with the bankruptcy trustee and creditors, reducing stress and preventing costly mistakes. If issues arise, such as challenges to your discharge or disputes over asset values, we can advocate on your behalf.
Our Edison attorneys bring a personalized approach to your Chapter 7 business bankruptcy and want to help you understand your situation and find the best possible outcome.
If your business is overwhelmed by debt, the experienced team at Gillman Capone is here to help. An Edison Chapter 7 business bankruptcy lawyer from our firm can guide you through the liquidation process, protect your rights, and help you move forward with confidence. Do not let financial stress control your future. Call us today for a free case review and find out if this is the best option or if another type of bankruptcy declaration makes more sense..
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