In a personal bankruptcy, a person has a few extra hoops to jump through to file for a Chapter 7 bankruptcy. There are classes that need to be passed and an income limit to make sure that you are under. For a business, the initial filing requirements are much more straight forward.
As long as your business owes money to someone or something, and as long as it has decided that it is time to close up shop, you can file for Chapter 7 Bankruptcy. As with all bankruptcies, there will be a handful of documents that will need to be submitted to file a business bankruptcy.
If the business still has assets, the Court will handle liquidation and distribution to creditors. Often times, businesses will have one large creditor with a security interest in everything that they own, which makes the Court’s job much easier. Having assets it not a requirement, however, and many businesses that file for Chapter 7 bankruptcy have little to no assets remaining when they file.
There is, currently, one major requirement that businesses must meet in order to file for Bankruptcy of any type. The Court is not allowed to handle a bankruptcy that involves stuff that is illegal under Federal law, even if that stuff is legal under State law. A business which grows, processes, or sells marijuana products, for example, is totally unable to successfully file for bankruptcy. Even after the business has disposed of its plant products, bankruptcy is still not an option due to the proceeds being comingled with other business assets.
Because the items that are required to file will vary from case to case, we recommend reaching out to an experienced bankruptcy attorney to go over your unique situation.