Businesses that have no way of repaying their piling debts may have to declare bankruptcy. Depending on the business's financial forecast, that bankruptcy may be Chapter 7, which will dissolve the corporation or partnership that owned the business.
The Chapter 7 process begins when a business declares itself bankrupt and files the necessary paperwork. When the bankruptcy court receives the filing, it will appoint a bankruptcy trustee to the company. The trustee is in charge of selling the company's assets and paying its creditors.
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The company's assets may include individual departments within the business, the company's other holdings, such as subsidiary companies, equipment that the business uses to perform its services, buildings and real estate, cash holdings, and any other valuable piece of property the company owns.
Depending on the debts that the corporation has, the trustee may have to sell all or part of the assets. When the trustee sells all assets, then the business will likely shut down. It is possible, however, for a business to stay open under new ownership after Chapter 7 bankruptcy.
After liquidating the company's assets, the trustee will have the task of repaying creditors. Once these creditors receive money, they will receive no more payment from the business even if the debt was not paid in full.
Declaring bankruptcy is a difficult task, so businesses should look for legal help when they are thinking about filing for bankruptcy. A lawyer can help move the process along faster and help protect a business' interests during this complicated undertaking.
If your business is facing bankruptcy, do not go at it alone. Discuss your case with the Arizona business bankruptcy attorneys of The Harmon Law Office, LLC, today to learn more about what you should do to declare bankruptcy.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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