If you are finding it difficult to keep up with business debt obligations but want to keep your business running, bankruptcy may help. The type of bankruptcy you choose to file could impact the outcome but it also depends on how your business is structured. Whether you are considering Chapter 7 , Chapter 11 or Chapter 13 , there are several factors to review.
If you want to keep your business open you’ll want to get an understanding of several factors:
- Is the business still making money?
- What assets does the business have that is worth more than liabilities?
- Who is liable for outstanding debt?
If you are making money then it is possible you could stay in operation during proceedings. Yet, it depends on the type of business you have and what effects the economy has on it. Some business owners may be able to stay open if facing hard times due to the economy, but if you are continuously losing money you may want to consider closing. For some, it they are personally liable for the debt the bankruptcy process could allow you to negotiate a deal with creditors. In this way, creditors won’t need to come after business assets.
The type of bankruptcy you file may also help determine how your business stays in operation. The way your business is structured and the amount of assets the business has may determine the best chapter to file. Yet, if you feel you want to close your business, Chapter 7 bankruptcy may prove to be the better option. Review questions and concerns with a qualified Dallas bankruptcy attorney .
Reference: https://www.nolo.com/legal-encyclopedia/bankruptcy-help-continue-business.html