Basics of Business Bankruptcy in Florida
Business bankruptcy can take many different forms, and each business bankruptcy case will have its own nuances given the distinctions particular to the business filing for bankruptcy, as well as the type of bankruptcy being filed. Accordingly, to have a clear understanding of what to expect if your business files for bankruptcy, you should discuss the details with one of our West Palm Beach business bankruptcy lawyers. In the meantime, we can give you the basics of business bankruptcy in Florida so that you have a general understanding of how your case might work.
Multiple Types of Business Bankruptcy
There are many types of business bankruptcy that a business may be able to file, depending on different eligibility factors. Common forms of business bankruptcy include:
- Chapter 7 bankruptcy, which is a liquidation bankruptcy for businesses and requires the liquidation of business assets;
- Chapter 11 bankruptcy, which is a reorganization bankruptcy for businesses, and a traditional Chapter 11 filing is generally the most complex type of reorganization bankruptcy for a business, so it will be important to determine if your business is eligible for another type of reorganization bankruptcy prior to filing a traditional Chapter 11 case;
- Subchapter V bankruptcy, which is a subset of Chapter 11 and is designed for smaller businesses and businesses with less debt, and is a streamlined and less complex type of reorganization bankruptcy; and
- Chapter 12 bankruptcy, which is a type of reorganization bankruptcy designed solely for family farmers and fishermen that is less complex and less expensive than a traditional Chapter 11 filing.
For business owners of sole proprietorships, it may be possible to file for Chapter 13 bankruptcy, but it is important to understand that other aspects of consumer or individual bankruptcy filings will apply to these cases.
Businesses Do Not Complete Education Requirements
Unlike individual debtors, businesses that are filing for bankruptcy do not need to complete the two education requirements necessary for individuals or married couples filing for bankruptcy (including pre-bankruptcy credit counseling and a post-filing debtor education course). However, it is important to be clear, as the US Trustee Program clarifies, that an individual who files for bankruptcy with primarily business debts (such as the owner of a sole proprietorship filing for Chapter 13 bankruptcy due to business debts) will need to complete these requirements.
Type of Bankruptcy Will Impact Whether Your Business Can Remain Open
Whether your business files for a liquidation bankruptcy under Chapter 7 or one of the types of reorganization bankruptcy will determine whether or not your business can stay open and continue operating. Liquidation bankruptcies require a business to close its doors, while businesses can remain operational during and after a reorganization bankruptcy.
Businesses Do Not Receive a Discharge in Chapter 7 Bankruptcy
Unlike in personal Chapter 7 bankruptcies, businesses that file for Chapter 7 bankruptcy do not receive a debt discharge. If you have concerns about whether you could be personally liable for business debts, you should discuss this with your attorney.
Contact a West Palm Beach Bankruptcy Lawyer Today
If you are considering bankruptcy for your business, you should get in touch with one of the experienced West Palm Beach bankruptcy attorneys at Kelley, Kaplan & Eller, PLLC to find out more about how we can assist you. We can answer any questions you have today about business bankruptcies, and we can help you with your bankruptcy filing from start to finish.
Sources:
law.cornell.edu/uscode/text/11
justice.gov/ust/frequently-asked-questions-faqs-credit-counseling
