It is possible for a business to file for bankruptcy. Several factors must be considered when determining what kind of bankruptcy to file. One factor to explore is whether your intention is to liquidate the business or to restructure the business and have it continue to operate as a going concern.
If your intention is to liquidate the business, the business can file a Chapter 7 liquidation bankruptcy. Even though a business cannot receive a discharge in a Chapter 7 bankruptcy, the bankruptcy can aid in winding down the business in a controlled way.
If your intention is to have the business continue to operate as a going concern, a Chapter 11 reorganization bankruptcy can help you restructure the debts of the business by proposing a Plan of reorganization as to how the business will pay its debts moving forward.
If and only if the business is operated as a sole proprietorship (which is to say there is no corporate structure such as an LLC, S-Corp, C-Corp, etc.), it is possible for you to file a Chapter 13 debt repayment bankruptcy to resolve your business debts.
The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.
By: Michael Benkstein, Esq.
Managing Attorney, Bankruptcy Department
The Law Offices of Joumana Kayrouz, PLLC
1000 Town Center
Southfield, MI 48075