What Options are Available for Your Company?
For business owners, it’s important to understand the differences and similarities between personal and business insolvency. Corporations, limited liability companies, and partnerships can be considered separate legal entities and file in their own right without involving the personal credit of the owner(s) by filing either Chapter 7 or Chapter 11.
These two chapters provide different means of eliminating debt, but they each have their strengths and weaknesses. Chapter 7 involves liquidating property and selling it in order to pay off debt. It also means that your business must cease operations immediately, unless it is allowed to continue by a Chapter 7 Trustee. Chapter 11 typically allows you to remain in control of your company, but under the jurisdiction and oversight of the court as a debtor in possession. Your business will be restructured and continue to operate, but a specific amount of profits will be paid to creditors to eventually eliminate debt.
Determining which Chapter is right for your company can help you avoid unnecessary damage and give your company the best chance at successful recovery.
Sole Proprietorships, on the other hand, are extensions of the owner and can’t file bankruptcy separately from the owner. Balancing both personal and company finances during the process can be very tricky and will require proper insight to avoid costly mistakes.
For reasonable fees, we will create a winning strategy for a positive outcome. Contact us online or call us today for a free confidential and straightforward conversation with one of our knowledgeable attorneys at (949) 570-5025.
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At McFarlin LLP we understand what you’re facing. We’re not here to impress you with our financial knowledge or wow you with legal jargon, our goal is simple: to help. Our experienced lawyers can offer up to date legal advice and personalized attention. We will create a winning strategy for a positive outcome at a reasonable cost.