Can a Business File a Chapter 7 Bankruptcy?

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Question: I started a business in Alpharetta about 2 years ago. I live in Cumming, GA. We do consulting for companies. But things have not been good. The business has a lot of debt. We bought equipment and I have 7 employees. I have a lot of credit card debt and I owe taxes to the IRS and the state of Georgia. I was wondering if a business can file a chapter 7 bankruptcy. I know businesses file different types of bankruptcy petitions than do individuals, but I heard that a company file a chapter 7 under some circumstances. I need to close the business and can’t afford to pay back all the debt. My friend who lives in Milton, GA filed a chapter 7 with his small business but is it really rare? My business needs to go bankrupt. I need help as soon as possible.

Answer: A business can file a chapter 7. A large business can file a chapter 7 and a small business can file a chapter 7. Many business owners may not be aware that they can file a chapter 7 business bankruptcy petition just like an individual can. A chapter 7, generally speaking, is utilized to discharge (that is eliminate) a business' debt. We have seen all types of businesses file a chapter 7, including restaurants, tech companies, retail stores, consultancies, car dealers, medical offices, construction companies, real estate developers, beauty salons, dance schools and not-for-profit companies.

A bankruptcy attorney can advise you of the best way to proceed after carefully reviewing your situation and doing a full financial assessment.

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