What should I know about filing for business bankruptcy?

Business bankruptcy is a legal process that small business owners in Delaware can utilize if their business is no longer able to meet its financial obligations. When filing for business bankruptcy, it is important to determine whether to file under Chapter 7 or Chapter 11 of the US Bankruptcy Code. Chapter 7 bankruptcy is known as liquidation bankruptcy, meaning that a court-appointed trustee will sell the business’s assets to pay off the company’s debts. When filing under this chapter, the business will cease operations and the owner will no longer be personally responsible for the business’s debts. Chapter 11 bankruptcy, also known as reorganization bankruptcy, will allow the business to remain in operation while restructuring its debts. A court-appointed trustee will help the business develop a plan to reorganize and pay its debts over time. In most cases, the business owner will remain in control of the business but will be required to make payments to creditors over a three to five-year period. The business owner should also be aware of Delaware’s legal requirements for filing for bankruptcy. For example, the business must have been operating for at least two years before filing, and the owner must submit financial documents, including all debts and assets. The business owner must also attend credit counseling before filing. Filing for business bankruptcy can be a daunting process that requires the help of a qualified attorney. An attorney can help guide the business owner through the legal requirements and ensure that all paperwork is correctly filed. Ultimately, filing for business bankruptcy can provide financial relief for a struggling business and allow it to get back on its feet.

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What should I know about filing for business bankruptcy?

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