In bankruptcy, a business can get legal relief from its debts. The goal of a successful bankruptcy is to give business owners a clean slate, financially speaking, while offering a fair solution to creditors. Businesses can file for Chapter 7 or Chapter 11 bankruptcy; once the process starts, creditors are legally barred from further collection attempts until the case is over.
Different Types of Business Bankruptcy
Each of the two types of bankruptcy mentioned above has its pros and cons, as discussed below:
• It’s easier and quicker than Chapter 11
• It only requires one court visit
• Business owners must sell some assets
• A trustee manages the case
• The business will likely close as a result
• The business can continue to operate
• No asset sell-off is required
• Trustee appointment is not necessary
• Cases are longer and more complicated
• Debts must be repaid over time
Hiring a Lawyer
It can be complicated and frustrating to file for bankruptcy if you don’t know anything about the process. Hiring a Business Bankruptcy Attorney in Cicero IL can help you get through the procedure easily, because attorneys are familiar with state laws on bankruptcy. If you need help filing Chapter 7 or Chapter 11 for your business, Contact Schottler and Associates today.
In Chapter 11, businesses can reorganize finances while gradually paying debts, and they can continue to operate once the case is over. Chapter 11 cases start when the business owner files a petition, and from then, the business has 120 days to put together a reorganization plan. The plan may involve selling unprofitable divisions, and it must detail how debts will be repaid.
In Chapter 7, a business sells off its assets to pay debts. The process starts with the filing of a petition in bankruptcy court; the petition must list the business’ debts, assets and financial history. The bankruptcy court will designate a trustee, who will in turn sell off the business’ assets to pay debts. Some debts are discharged, but some are not, such as government penalties, taxes and prior bankruptcy debts. In most cases, businesses cease to exist after Chapter 7 bankruptcy. If you’re a business owner in financial trouble, a Business Bankruptcy Attorney in Cicero IL can help you reorganize your business or liquidate it to pay creditors.