How to File for Bankruptcy as a Business

Bankruptcy laws have paved the way for businesses to restructure their financial positions. Often, even the most conscientious business owners find themselves in debt, due either to a struggling economy or business decisions that turned out poorly. Before you decide to file for bankruptcy, you will want to consider every option for restructuring your business, and possibly consult an attorney. If you can find no option for salvaging the business, there are certain steps you need to follow in order to file for bankruptcy. Use these tips to file for bankruptcy as a business.


  1. Image titled File for Bankruptcy as a Business Step 1
    Choose a bankruptcy attorney to help you through the process of filing.
    • Look for an attorney through your local or state bar associations or other professional organizations, such as The Association of Consumer Bankruptcy Attorneys or the American Bankruptcy Institute.
    • Check to see if the attorney is certified with the American Bankruptcy Institute, where he will have received additional bankruptcy training.
    • Ask the attorney questions, such as how many business bankruptcies she has handled, how the process will work, what fees will be involved, and how long the legal process will take.
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    Decide what type of bankruptcy you will file. Ask your attorney which type of filing is best for your business needs. If you wish to dissolve the company, you will need to file Chapter 7 bankruptcy, which will allow the remaining assets of the business to be distributed to any creditors. Chapter 11 bankruptcy will allow you to restructure the company so that you are able to absolve some debts and pay creditors within time and through various means, including shareholding options.
  3. Image titled File for Bankruptcy as a Business Step 3
    Provide your attorney with all the necessary documents. The attorney will determine what the court needs for your specific filing. This may include a list of people to whom you are in debt, an accounting of all your company debts and assets, tax documents and stock information.
  4. Image titled File for Bankruptcy as a Business Step 4
    Have your attorney file your bankruptcy petition. Once the petition is filed, the court will appoint a trustee to the case.
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    Attend the first meeting with creditors. This will be somewhat like a hearing, where you will answer questions from both the trustee and your creditors. All documentation will be discussed, and the trustee will attempt to allocate any assets that your company has to creditors. The court will typically have 60 days in which to review your case.
  6. Image titled File for Bankruptcy as a Business Step 6
    Follow the discharge orders of your bankruptcy case. In the case of filing Chapter 7 for your business, your discharge will dictate that your company is dissolved. If you have filed Chapter 11, you will be given new guidelines for restructuring your payment plans to all creditors.

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Categories: Bankruptcy