A chapter 7 for a business follows a similar process as a chapter 7 case for an individual, with the exceptions that a business entity such as a partnership or corporation does not receive a discharge.
In addition, a business entity does not claim exemptions and any assets of the business debtor become subject to liquidation by the case trustee. Because a business does not receive a discharge or exempt property, the benefits are somewhat limited.
The primary benefit for a business in chapter 7 is that it provides for an orderly wind down and liquidation of the business’ affairs, and places the burden of selling assets and paying creditors on the case trustee instead of the owners of the business.
The benefit may be outweighed by risks or costs if business owners remain liable for any personal guarantees, as well as expose owners to other potential liability, such as fraudulent transfer or alter ego claims which will be investigated by the case trustee.
If it is determined a business chapter 7 would make sense in your situation, I would be happy to prepare and assist you with your case.
