If your business is struggling to stay afloat and you want to shut your doors, then it may be time to think about entering into a Chapter 7 bankruptcy. A Chapter 7 business bankruptcy lets you liquidate your assets to cover the debts you owe. However, you do need to meet specific requirements before you’ll be allowed to pursue that bankruptcy option.
If you are considering a Chapter 7 business bankruptcy, remember that there are some kinds of debts that you won’t be able to eliminate. Those may include:
- Any money that was obtained through fraud
- Tax debts, such as payments for sales taxes
- Debts owed because of negligence
Many companies are able to pursue a Chapter 7 bankruptcy, though, and doing so gives the owners great relief in being able to walk away from the business without further liability.
Will you be able to stay open after a bankruptcy?
Depending on your situation, you should know that you may end up with little to nothing remaining of your business assets once your debts are paid back. However, in some cases, those who pursue a Chapter 7 bankruptcy are able to stay open if they are able to repay what they owe and have enough financial support remaining following the liquidation.
If you want to stay open, a Chapter7 bankruptcy may not be the right option for you. Other options, like a Chapter 11 bankruptcy, could give you more support in restructuring your debts and helping you work toward more sustainable business practices in the future.
Our website has more information on bankruptcies and how businesses can use them to their advantage as they deal with unwanted debts.