Understanding Chapter 7: Know When It’s Time
Bankruptcy can be a sensitive subject for many new business owners. If you are just starting out, the last thing you want to think about is the possibility that your business will fail. Despite this, it is important that you know what options exist should you find yourself in a situation that warrants the need. When there seems to be no hope for your independent business, you may want to consider declaring Chapter 7.
What is Chapter 7?
Before consulting with a Boston business attorney about the future of your business, it is important that you understand what you are facing. Business bankruptcy is not pleasant, and Chapter 7 is intended for those cases when it is time to liquidate. Keep in mind that Chapter 7, also called liquidation, is intended when you are unable to recover from debts and see no chance of restoring the business. With that in mind, some factors to consider include:
- What type of business are you involved in? If you have a sole proprietorship, you may want to declare personal bankruptcy to wipe out both your personal and business debts.
- If you are operating a partnership, corporation, or an LLC, Chapter 7 does not discharge you from debt. The idea is to liquidate your assets and use that money to pay off what you owe.
- When done properly, Chapter 7 can help you avoid any personal debts, which will make your own financial situation a lot more promising.
Can You Recover?
As per the conditions of Chapter 7, there is really little chance that you can revive your current business. Despite this, it is important to remember that you can always work your way back up. One failure does not mean that you should give up on your dreams of business ownership, so don’t be afraid to re-work your strategy on getting back in the driver’s seat.
Though no one goes into business expecting to declare business bankruptcy, it is important that you know when it is time to consider it. If you don’t already have a Boston business attorney, this is the time to look for one who can help guide you through making the right decisions. When you find that your family business is faltering and you wish to seek out the best professional advisor to help decide if Chapter 7 is the right move for you, contact Jeffrey Cymrot of Sassoon & Cymrot for individual guidance and consultation.