Home>When is a Chapter 7 the best choice for the company / shareholder / owners?
When is a Chapter 7 the best choice for the company / shareholder / owners?
June 29, 2022
By Diane Drain Attorney & Retired Law Professor
A Chapter 7, whether for the individual or a corporation, may be the best choice when:
the business has no future,
it has no substantial assets or qualities that cannot be reproduced, or
the debts are so overwhelming that restructuring them is not feasible.
Individuals can get a discharge of the dischargeable debts and a chance to start over. Corporations don’t get discharges, but a Chapter 7 can provide an orderly liquidation under the direction of the trustee and at no expense to the debtor. Creditors are assured that they will be paid to the extent of the assets available and the priority of their claim. Former management is assured that the assets that are available go (after the expenses of the Chapter 7) to pay taxes for which the individuals may be liable.
By Diane Drain|Published On: June 29th, 2022|Last Updated: July 28th, 2022|
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
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