Much like an individual can file for bankruptcy, businesses also have options when it comes to dealing with unmanageable debt. If you own a business and it is becoming increasingly difficult to manage your finances and handle the debt your business has incurred, you may want to consider a Business Bankruptcy Chicago proceeding in order to rectify your current debt situation. However, there are a few different options you’ll have when it comes to bankruptcy, which is why you want to make a point to speak with a dedicated business bankruptcy lawyer to see what your options are.
The first option for business bankruptcy is chapter 7. This particular bankruptcy filing is an indication that your business is closing its doors. This will offer you some protection from your creditors and that once you file for Chapter 7, the bankruptcy court will then appoint an adviser that will begin liquidating the business assets in order to pay off creditors. In this bankruptcy filing, the creditors with the least amount of risk or the lowest amount of credit lent to the business will be the first ones to be repaid.
The second option for business bankruptcy is chapter 11. This is the most common type of bankruptcy and it is an indication that the business plans on returning after they have had the opportunity, with the help of the courts, to restructure their debt that has become unmanageable.
In most cases, Chapter 11 focuses on restructuring debt or in some cases eliminating certain debts in order for the business to become solid once again. It’s important to remember that this type of bankruptcy is the most complicated filing, which makes it the most expensive, with court costs and lawyer fees in order to restructure of businesses existing debt.
Whatever situation your business may be in, if you’ve found that the debt that your business has accumulated is too great to handle, it may be time to consider bankruptcy. If your business is past the point of no return, chapter 7 may be adequate for you to move past your business without a great deal of debt. If you feel that your business can survive, restructuring your debt through Chapter 11 may be your best option. Whatever the case may be, it’s best to speak with a legal professional to explore your options before making any final decisions.