Archive for the ‘Philadelphia Bankruptcy Lawyer’ Category

In filing business bankruptcy, you should first determine if it is a business corporation, partnership or a proprietorship.

A corporation, a limited liability company and a partnership which are legal entities that is detach from shareholders or partners, can file under Chapter 7 or Chapter 11 bankruptcy. If you want to retain the business and reorganize the business debt, you can file under Chapter 7 but if the business should stop operating and the assets be liquidated you can opt Chapter 7. It is also a must to understand that a corporation does not obtain a discharge of its debts under the Chapter 7 case. A corporation filing a Chapter 7 bankruptcy can have several benefits. If the corporation has assets to be liquidated, an independent trustee is allowed to sell the assets and pay the creditors on the proceeds receive in order of priority.

Another benefit is when the creditors are informed that there is nothing left from the corporation and will not operate anymore they can no longer file complaints against the corporation. The creditors can still sue the corporation after the bankruptcy case is over but it is no longer relevant. One thing to remember is that in fling Chapter 7 or 11 for a corporation does not free the corporation’s officers and principals of their personal obligations.

Under proprietorship’s, they can not file bankruptcy alone since the assets and liabilities of the business are just a single form of assets of the owner. The sole owner may file under Chapter 7, 11 or 13 provided the debt required is met.

RE: Philadelphia Bankruptcy Lawyer