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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 30898
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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what are some of the negative consequences of bankruptcy for

Resolved Question:

what are some of the negative consequences of bankruptcy for a business owner?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 4 years ago.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.

Are you filing individually of on behalf of the business only?
Customer: replied 4 years ago.

Our business is being sued by a former employee for OT. We do not have money to pay so we are considering filing for bankruptcy as a a company. It is a LLC. What are the negative consequences if we file?

Expert:  Roger replied 4 years ago.

In order to avoid liability for a judgment, you would have to file a chapter 7, which is a complete liquidation of the business, which in turn, would shut the business down for good, liquidate assets, etc. Thus, filing a chapter 7 would end the business.


If you were to file a Chapter 11, which is a business reorganization, you would be allowed to continue your business, but you would still have to pay any judgment entered against you. Thus, this would not effectively get you around your liability.

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