How can we declare a business bankruptcy? - Bankruptcy Law Questions and Answers- LawQA.com

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How can we declare a business bankruptcy?

We own a small business corporation. We have been unable to pay bills for several months and are closing our doors next week. Will we be personally responsible? How do we declare business bankruptcy?

Theodore N. Stapleton, PC
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You could file a chapter 7 for the business or simply let creditors get judgments against the company as long as you have not personally guaranteed the business debt.

Answer Applies to: Georgia
Replied: 11/9/2011

Answer By Kevin Heupel
Heupel Law
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Business debts can be complicated so my best advice is to consult a bankruptcy attorney who handles business debts.

Answer Applies to: Colorado
Replied: 11/4/2011

Answer By Phil Boardman
Philip R. Boardman, Attorney at Law
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You will probably have to file a personal bankruptcy since you may be personally liable for the business debts.

Answer Applies to: Virginia
Replied: 11/4/2011

Answer By Mengjun Qiu
The Law Offices of Kristy Qiu
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That depends on the corporate structure. If you set it up as a limited liability company, you won't personally liable, however, if you have ever personally guaranteed a loan or credit card, you will remain personally liable even if your comp is limited in liability. If you're closing your doors, what you need is probably a chapter 7. business bankruptcy is extremely complicated.

Answer Applies to: Florida
Replied: 11/4/2011

Answer By Bill Zurinskas
Bankruptcy Law Center
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A corporation can file for chapter 7 bankruptcy (liquidation) but cannot receive a discharge of its debts. A corporation can file chapter 11 bankruptcy to restructure its debts, but this procedure is very expensive for a small corporation. More commonly the shareholders, directors and officers of the corporation are also liable for the coporations debts (generally by co-signing or guaranteeing the corporate debts) and end up filling for personal bankruptcy.

Answer Applies to: Colorado
Replied: 11/4/2011

Lake Forest Bankruptcy
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This depends upon which business form you have, and whether you even need to file a Business Bankruptcy. Many times, a business bankruptcy is actually unnecessary; If you have a corporate entity, then unless you are a co-signer on these corporate debts, you can let the corporation deal with the debt and never close it. Thats the point of having a corporation. You also need to be VERY VERY CAREFUL about filing the Corporate Bankruptcy simply because transfers from the corporate entity to you can be pulled back by the Chapter 7 Trustee. You could be forced to disgorge what monies the Corp paid you within 2 years prior to filing. If you are personally liable for the debt, or you have a sole-proprietorship, then you yourself may need to file the Bankruptcy. Bottom line: DO NOT file the corporate bankruptcy without seeking counsel. It may be a fantastically horrible thing to do.

Answer Applies to: California
Replied: 11/4/2011

Answer By Darren Aronow
The Law Office of Darren Aronow, PC
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You can see a local attorney and file a business bankruptcy under chapter 7 to get rid of unsecured business debt. However, if you personally guaranteed anything, such as office lease, equipment lease, loans, etc, then you will still be liable personally. You may be better off shutting down the business and filing personal bankruptcy.

Answer Applies to: New York
Replied: 11/4/2011

Charles R. Nettles - Attorney at Law
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Filing for a business bankruptcy is not a whole lot different than filing a personal bankruptcy, it's a matter of pulling together all of the necessary paperwork to answer the questions in the bankruptcy petition and filling it out. As far as personal liability, that will depend in large part upon how you obtained the credit and through whose name it was under. If you signed a personal guaranty on the debt, you will be held liable.

Answer Applies to: Texas
Replied: 11/4/2011

The Law Offices of Seth D. Schraier
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First, it depends what the filing status of your business is. If you filed with the New York Secretary of State as a LLC or related limited liability company, then you can shield yourself personally from the debt that the business accrued. Secondly, you should consult a bankruptcy attorney, as it appears you have a case to file for Bankruptcy on behalf of your business and eliminate the debts as much as possible. It is highly recommended that you hire a bankruptcy attorney, as the filing process and forms to file and have your bankruptcy granted can be quite daunting.

Answer Applies to: New York
Replied: 11/3/2011

Answer By William Weber
Weber Law Firm, P.C.
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Consult with a qualified attorney. Bankruptcy is too complicated to pursue without an attorney.

Answer Applies to: Texas
Replied: 11/3/2011

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