Monmouth County Business Bankruptcy Attorney
A business considering filing a bankruptcy petition will be able to choose from a Chapter 7 or Chapter 11 bankruptcy case. Chapter 7 provides for the orderly liquidation of a business. The Chapter 7 Trustee appointed to a business bankruptcy case, will be responsible for liquidating the assets of the business and making a distribution to certain creditors. A business must cease operations upon the filing of a Chapter 7 bankruptcy.
A Chapter 11 bankruptcy case provides for reorganizing the business. A business can file a Chapter 11 if it believes that upon its reorganization, it can continue operating and pay ongoing future expenses. The general purpose of a Chapter 11 filing is to allow a business some breathing room from aggressive creditor activity while it restructures its finances.