Chapter 7 For Businesses

If you own a business that cannot meet its financial obligations, you essentially have two options: You can reorganize the business’s debt and continue running the business; or you can close the business and liquidate its assets.

Chapter 7 bankruptcy allows your business to be free of some or all of its debts; however, this option will force you to close the business and allow all of its assets to be liquidated by the Chapter 7 trustee.

Keep in mind, though, that if the proceeds from your business’s liquidated assets do not satisfy the business’s debt, you and any other owners or investors may be personally responsible for the remainder.

Chapter 7 bankruptcy is often the logical solution for small and family-owned businesses, since personal and business finances are often mixed. If you have difficulty separating business debt from personal debt, this might be one of the few options that will bring you financial relief.

However, keep in mind that if you have repaid loans to family members or insiders within the past 2 years, you may not be eligible to file for Chapter 7 bankruptcy.

In my years as a respected New York bankruptcy lawyer, I’ve handled thousands of Chapter 7 bankruptcy cases – many involving small and family-owned businesses.

If your business is struggling financially, and you can’t see the light at the end of the tunnel, contact me using the form on the left side of this page or call 1-212-239-3800 to set up a free, no-obligation meeting to talk about how I can help you.