Kansas City Chapter 7 Bankruptcy Lawyer Explains Business Bankruptcy
Why Chapter 7 May Be Your Best Option
Companies of all sizes and types use business bankruptcy to restructure their finances and assets. When most people hear the term “business bankruptcy,” they think of times in which corporations filed for Chapter 11 bankruptcy. However, this is not always the case.
Although Chapter 11 can offer relief for large companies looking to stay in business, if you want to close the business, you may benefit from filing a Chapter 7 bankruptcy. Chapter 7 bankruptcy is beneficial for business owners wanting to stop operations, liquidate, pay creditors and remove personal liabilities. Our Chapter 7 attorneys help you close your business, pay creditors and relieve you from any personal liability.
How to Handle Business Debts with Chapter 7 Bankruptcy
Chapter 7 bankruptcy is beneficial for companies wanting to stop operations and effectively cut their losses. The court will appoint a trustee for a business filing Chapter 7 bankruptcy. He or she will then oversee the liquidation of any unencumbered, saleable assets. The Chapter 7 trustee collects all available business assets and can use any reasonable method of sale. This may include listing properties for sale or inventory auctions, to repay your business debts.
The Trustee will determine which assets are unencumbered and available to sell by reviewing loan agreements, tax returns, bank account statements and financial reports of the business. The Chapter 7 trustee also has the ability to make any business decisions that will move the liquidation proceedings forward.
What Happens in a Chapter 7 Business Bankruptcy?
After completely liquidating the business, the trustee will consider each creditor claim. If there is no evidence to support a claim or the claim is not accurate, the Chapter 7 trustee will object and the court will need to resolve these objections. Before the final report and closing of the case, the trustee will use the money gained in the sale of the business assets to pay the approved creditor claims in addition to his or her fees. If there are any funds remaining, the owners of the closed business may acquire these funds.
If the company has no saleable assets and the trustee has no assets to sell or money to collect, a trustee will issue the final report. Since companies are not entitled to a Chapter 7 discharge, the case then closes and ends without the company receiving a discharge. This is the most common scenario when businesses choose to file for Chapter 7 bankruptcy.
Legal Counsel is Essential, Reach Out to a Chapter 7 Bankruptcy Lawyer Today
A Chapter 7 bankruptcy offers valuable resolutions to businesses affected by debt. However, it is essential to have qualified and experienced legal counsel who will assist in gaining you the greatest benefits from the bankruptcy process. Please speak with our Chapter 7 attorneys for a free consultation. Our goal as a bankruptcy firm is to help our clients find the debt solutions they need.