Chicago Small Business Bankruptcy Attorney
Helping Illinois Small Businesses Recover from Financial Problems
Businesses, just like individuals, can face financial problems. And like individuals, businesses have a number of legal options available for dealing with their financial setbacks. The Law Office of Thomas W. Drexler has over 25 years of experience helping both individuals and businesses recover from their financial troubles so that they can move forward to a successful future.
Bankruptcy Options For Small Businesses
Under a Chapter 11 bankruptcy, a small business can restructure their debts more favorably by continuing to make payments to their creditors. On the other hand, small businesses that file under Chapter 7, will have their property liquidated and their debts released, and they will discontinue business operations. When a business chooses to file Chapter 7 liquidation, a bankruptcy trustee will be appointed to oversee and assist with the liquidation of business assets and distribution of the proceeds among the creditors.
Unlike individuals, businesses do not receive a discharge in Chapter 7 bankruptcy, but the bankruptcy can provide closure and a means of efficiently and effectively reorganizing the business or winding down the business, depending on the option chosen. Bankruptcy also allows the automatic stay to protect the business from creditors racing to file lawsuits and attempting to seize business assets.
Termination of Business
If a business plans to discontinue operations, bankruptcy may not be necessary. Instead, the business owner might decide to simply shut down, dispose of the business assets himself, and presumably use the proceeds to pay creditors. This should not be done without appropriate legal advice because, in certain circumstances, the business owner may expose himself to personal liability. Although perhaps somewhat more expensive, closing the business through a bankruptcy proceeding might be the preferred method for dealing with business liquidation since it provides formal closure through the court and requires that the creditors be paid equitably and in accordance with applicable laws.