If your business is struggling to stay afloat, you do not need to face your creditors alone. Depending on the circumstances, you may qualify to file for a Chapter 7 business bankruptcy.

Financial hardship can be overwhelming and the path ahead may look unclear, but a Madison Chapter 7 business bankruptcy lawyer can a strategize the best approach for your case. Our knowledgeable business bankruptcy attorneys work tirelessly to help our clients avoid losing or having to sell vital assets, and we can evaluate all available options to help you move toward a debt-free future.

When to Consider Chapter 7 Business Bankruptcy

When a business is facing insurmountable debt due to cash flow problems, inadequate financing, poor market conditions, or other reasons, a Chapter 7 bankruptcy action can provide relief. Through a Chapter 7 bankruptcy, a debtor can sell off nonexempt assets and use those sales to fulfill outstanding creditor obligations in order of the creditor’s priority status.

Individuals and business entities can file for Chapter 7 bankruptcy. Because Chapter 7 is a liquidation bankruptcy rather than a repayment or reorganization plan, this route may not be ideal for everyone. However, a Chapter 7 bankruptcy often makes the most sense for small businesses, such as sole proprietors, because key exemptions can protect a range of assets and discharge many types of debts.

If you are a sole proprietor, exemptions in a Chapter 7 bankruptcy can allow you as the owner to retain essential items such as furniture, vehicles, and other items that can give you a fresh start for future business endeavors after the bankruptcy concludes. Larger enterprises may be ineligible for the same exemptions a sole proprietor would in a Chapter 7 business bankruptcy action. Enterprises such as corporations or partnerships cannot discharge debt in a Chapter 7 case.

Many Chapter 7 actions lead to the closure of the business. In some cases, it may be possible for a sole proprietor to keep the doors of their business open by filing for personal bankruptcy. An attorney in Madison can advise whether a Chapter 7 or another business bankruptcy action is the right choice for your situation or whether you may be eligible for financial restructuring of your business outside of bankruptcy.

Key Steps in the Chapter 7 Business Bankruptcy Process

A Madison lawyer can handle each step of filing for a Chapter 7 business bankruptcy. The process starts when a petition is filed in the local bankruptcy court. This petition must contain key information, including the debtor’s income, expenses, contracts, leases, assets, and liabilities.

Once a bankruptcy action is initiated, creditors are subject to an automatic stay. This means they are not permitted to take penalizing actions or otherwise pursue repayment from the debtor while court proceedings are underway.

Some creditors, such as those collecting child support, may still be permitted to seek repayment during a Chapter 7 bankruptcy action. The debtor’s creditors will meet after the petition is filed. During this meeting, the debtor will answer questions from creditors and the bankruptcy trustee. Our bankruptcy attorney can provide invaluable representation at all these proceedings.

A successful meeting can lead to a discharge of unsecured debts as nonexempt assets will be liquidated to pay creditors. While some businesses may close after a Chapter 7 action is concluded, our attorneys will do everything possible to help you avoid this step or examine alternative bankruptcy actions that could allow you to keep your doors open.

Get Help from a Madison Chapter 7 Business Bankruptcy Attorney

Filing for Chapter 7 business bankruptcy is efficient and generally takes just under four months from start to finish. If you are a sole proprietor running a business, you can erase both personal and business debt with a single filing.

A Madison Chapter 7 business bankruptcy lawyer can help you understand what exemptions are available to safeguard your assets while working to secure your long-term financial health. Our bankruptcy attorneys can help you navigate this overwhelming process while taking immediate steps to stop creditors from harassing you, filing actions, or seizing assets.

Contact our office today to discuss your situation further in a personalized legal consultation.