Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
There are 2 types of business Bankruptcy - reorganization and liquidation. If you want to continue running the business, you would want to file the reorganization. With a reorganization, your creditors have to agree to a accept less than what is owed, and this amount is paid to them over a period of time (usually less than one year).
With a reorganization, you would be able to keep your company name and assets.
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With a re-organization, you would make a proposal of an amount that you are willing and able to pay your creditors. The creditors - not the Bankruptcy court - are the ones who have to accept the proposed amount.
Whether and how much they will accept will very much depend on the total market value of the S-Corp's assets, because this is the amount they can get if there is no agreement.