findquickanswers.com
  • Business
    The Difference Between Business Bank Accounts and Merchant Accounts
  • Business
    The Risks of Credit Card Processing for your Business
  • Business
    What’s the Difference Between a Language Translator and an Interpreter?
  • Health
    • Hernia: An Overview

      Hernia: An Overview

    • Natural Remedies for Psoriasis

      Natural Remedies for Psoriasis

    • Multiple Sclerosis Drug

      Multiple Sclerosis Drug

    • ZETIA Cholesterol Lowering Medication

      ZETIA Cholesterol Lowering Medication

    • Chronic Constipation Drugs

      Chronic Constipation Drugs

    • Cholesterol
      • Cholesterol Medications

        Cholesterol Medications

    • Diabetes
      • Resistance

        Resistance

      • Pumps

        Pumps

      • Types

        Types

      • Shots

        Shots

      • Facts

        Facts

    • Digestive Disorders
      • Chronic Constipation Disease

        Chronic Constipation Disease

      • Laxative for Opiate Constipation

        Laxative for Opiate Constipation

      • Chronic Constipation Drugs

        Chronic Constipation Drugs

      • IBS Treatment Centre

        IBS Treatment Centre

      • Irritable Bowel Syndrome Abdominal Pain: What it Means

        Irritable Bowel Syndrome Abdominal Pain: What it Means

    • Insurance
      • Benefits of Insurance for Military and Family

        Benefits of Insurance for Military and Family

      • Why You Should Avoid Private Home Mortgage Insurance

        Why You Should Avoid Private Home Mortgage Insurance

      • How Does Cancer Affect Your Life Insurance?

        How Does Cancer Affect Your Life Insurance?

      • Is Business Insurance Worth The Cost?

        Is Business Insurance Worth The Cost?

      • When Should you Change your Car Insurance Policy?

        When Should you Change your Car Insurance Policy?

    • Pain Relief
      • Shingles Pain Relief

        Shingles Pain Relief

      • Treatment of Rheumatoid Arthritis Hand Pain

        Treatment of Rheumatoid Arthritis Hand Pain

      • 6 Natural Rheumatoid Arthritis Treatments for Flare-Ups

        6 Natural Rheumatoid Arthritis Treatments for Flare-Ups

      • Irritable Bowel Syndrome Abdominal Pain: What it Means

        Irritable Bowel Syndrome Abdominal Pain: What it Means

      • 5 Best Ways to Cope with Ulcerative Colitis

        5 Best Ways to Cope with Ulcerative Colitis

    • Fitness
      • What You Should Know Before Buying A Treadmill

        What You Should Know Before Buying A Treadmill

    • Personal Care
      • What You Can Use Instead Of Deodorant

        What You Can Use Instead Of Deodorant

  • Finance
    • What to Know About Rewards Credit Cards

      What to Know About Rewards Credit Cards

    • JetBlue Plus Card

      JetBlue Plus Card

    • Discover it® Miles

      Discover it® Miles

    • Credit Repair Companies and How They Work

      Credit Repair Companies and How They Work

    • Gold Delta SkyMiles® Credit Card from American Express

      Gold Delta SkyMiles® Credit Card from American Express

    • Credit Cards
      • What to Know About Rewards Credit Cards

        What to Know About Rewards Credit Cards

      • Spirit Airlines World MasterCard

        Spirit Airlines World MasterCard

      • United MileagePlus® Club Card

        United MileagePlus® Club Card

      • Wells Fargo Propel 365 American Express® Card

        Wells Fargo Propel 365 American Express® Card

      • U.S. Bank FlexPerks® Travel Rewards Visa Signature® card

        U.S. Bank FlexPerks® Travel Rewards Visa Signature® card

    • Cash Advances
      • What are the Pros and Cons of Merchant Cash Advances?

        What are the Pros and Cons of Merchant Cash Advances?

      • Pros and Cons of Taking Out an Installment Loan

        Pros and Cons of Taking Out an Installment Loan

    • Business Loans
      • What are the Pros and Cons of Merchant Cash Advances?

        What are the Pros and Cons of Merchant Cash Advances?

      • 5 Things You Should Know Before Getting Consolidation Loans

        5 Things You Should Know Before Getting Consolidation Loans

    • Loans
      • What You Should Know Before Getting a Car Title Loan

        What You Should Know Before Getting a Car Title Loan

      • Pros and Cons of Taking Out an Installment Loan

        Pros and Cons of Taking Out an Installment Loan

      • How Payday Loans Work and What They Cost

        How Payday Loans Work and What They Cost

    • Retirement
      • 8 Tips for a Secure Retired Life

        8 Tips for a Secure Retired Life

      • How Your Roth IRA Could Be Your Emergency Fund

        How Your Roth IRA Could Be Your Emergency Fund

      • The Difference between a Regular Savings Account and an IRA…

        The Difference between a Regular Savings Account and an IRA…

      • How You Can Use Mutual Funds for Retirement

        How You Can Use Mutual Funds for Retirement

  • Auto
    • Electric or Hybrid Car: Pros & Cons

      Electric or Hybrid Car: Pros & Cons

    • Selling Your Used Car: A Guide

      Selling Your Used Car: A Guide

    • The 10 Best Hybrid Cars You Should Consider Buying

      The 10 Best Hybrid Cars You Should Consider Buying

    • Top 10 Hybrid Cars Under $30,000

      Top 10 Hybrid Cars Under $30,000

    • 4 Steps to Follow When Trading in Your Car

      4 Steps to Follow When Trading in Your Car

    • 10 Best Family Vehicles of 2016

      10 Best Family Vehicles of 2016

  • Business
    • Business Trip Language Translator Services

      Business Trip Language Translator Services

    • What’s the Difference Between a Language Translator and an Interpreter?

      What’s the Difference Between a Language Translator and an Interpreter?

    • Proven Tips For Flea Control

      Proven Tips For Flea Control

    • 6 Facts You Need to Know About Accident Lawyers

      6 Facts You Need to Know About Accident Lawyers

    • 5 Questions You Should Ask Your Accident Lawyer

      5 Questions You Should Ask Your Accident Lawyer

    • Why You Shouldn’t Hire an Accident Attorney

      Why You Shouldn’t Hire an Accident Attorney

  • Medical
    • Is This ‘Manly’ Behavior Shortening Your Lifespan?

      Is This ‘Manly’ Behavior Shortening Your Lifespan?

    • Chronic Hep C Treatment

      Chronic Hep C Treatment

    • Xifaxan IBS Constipation

      Xifaxan IBS Constipation

    • Breast Cancer Treatments

      Breast Cancer Treatments

    • What is a Pulmonary Embolism?

      What is a Pulmonary Embolism?

    • Cancer
      • Breast Cancer Treatments

        Breast Cancer Treatments

      • IBRANCE Palbociclib Breast Cancer Treatments

        IBRANCE Palbociclib Breast Cancer Treatments

      • Advanced Breast Cancer

        Advanced Breast Cancer

      • Advanced Breast Cancer Treatment

        Advanced Breast Cancer Treatment

      • HER2 Breast Cancer Treatments

        HER2 Breast Cancer Treatments

    • Psychiatry
      • 7 ADHD Facts You Need to Know

        7 ADHD Facts You Need to Know

      • 5 Surprising Signs Of Depression

        5 Surprising Signs Of Depression

      • ADHD Treatment Options And Strategies

        ADHD Treatment Options And Strategies

      • Possible Schizophrenia Treatments and Drugs

        Possible Schizophrenia Treatments and Drugs

      • 10 Signs: Recognizing the Symptoms of Bipolar Disorder

        10 Signs: Recognizing the Symptoms of Bipolar Disorder

    • Dermatology
      • All About Psoriasis: From Plaque Psoriasis Treatments to Pustular

        All About Psoriasis: From Plaque Psoriasis Treatments to Pustular

      • Plaque Psoriasis Treatement

        Plaque Psoriasis Treatement

  • Tech
    • The Best Platforms for Custom Mobile App Development

      The Best Platforms for Custom Mobile App Development

    • Samsung Galaxy Note 10 New Smartphone

      Samsung Galaxy Note 10 New Smartphone

    • 5 Best Small Business Internet Providers

      5 Best Small Business Internet Providers

    • 5 Ways To Transfer Money With Your Smartphone

      5 Ways To Transfer Money With Your Smartphone

    • 5 Reasons Your Business Needs Strong Firewall Network Security

      5 Reasons Your Business Needs Strong Firewall Network Security

    • Games
      • Top 5 Addictive Games For Your Smartphone

        Top 5 Addictive Games For Your Smartphone

    • Phone Systems
      • Top 5 Advantages of a Hosted PBX Phone System

        Top 5 Advantages of a Hosted PBX Phone System

      • Everything You Should Know About VoIP

        Everything You Should Know About VoIP

      • How Switching to a VoIP Phone System Can Help You…

        How Switching to a VoIP Phone System Can Help You…

      • How a VoIP Phone System Could Help Your Small Business

        How a VoIP Phone System Could Help Your Small Business

      • Why 8×8 is the Best Small Business Phone Service

        Why 8×8 is the Best Small Business Phone Service

    • Smartphone
      • Top 5 Addictive Games For Your Smartphone

        Top 5 Addictive Games For Your Smartphone

      • 5 Ways To Transfer Money With Your Smartphone

        5 Ways To Transfer Money With Your Smartphone

    • Video Conferencing Solutions
      • Top 6 Affordable Video Conferencing Solutions

        Top 6 Affordable Video Conferencing Solutions

      • 5 Ways to Improve Video Conferencing Solution

        5 Ways to Improve Video Conferencing Solution

    • Internet
      • 5 Best Small Business Internet Providers

        5 Best Small Business Internet Providers

      • 5 Reasons Your Business Needs Strong Firewall Network Security

        5 Reasons Your Business Needs Strong Firewall Network Security

      • How a Hybrid Cloud Can Change Your Life and Workspace

        How a Hybrid Cloud Can Change Your Life and Workspace

      • Top 5 Tips for Email Marketing for Small Business

        Top 5 Tips for Email Marketing for Small Business

    • Security
      • 5 Reasons Your Business Needs Strong Firewall Network Security

        5 Reasons Your Business Needs Strong Firewall Network Security

      • 5 Things to Know Before Installing A Home Security System

        5 Things to Know Before Installing A Home Security System

      • 3 Best Home Security and Alarm Systems

        3 Best Home Security and Alarm Systems

  • Travel
    • Ways You Can Afford To Study Abroad

      Ways You Can Afford To Study Abroad

    • Translator Apps for Your Next Vacation

      Translator Apps for Your Next Vacation

    • Things to Know about Air Ambulance

      Things to Know about Air Ambulance

    • How to Maintain Your Air Conditioner

      How to Maintain Your Air Conditioner

    • Helpful Tips to Get a Green Card Through Family Members

      Helpful Tips to Get a Green Card Through Family Members

    • 4 Ways to Securing a Green Card

      4 Ways to Securing a Green Card

Bankruptcy and Business: How Does it Work?

by Joel Carson

When starting up a company, your advisers will tell you to legally separate your personal finances from the company finances. This separation is one of the most important benefits of early incorporation. Separating yourself from the company legally will protect your personal finances just in case things in the company do not work out as expected.

Simply put, in the case that your company is declared bankrupt, there will be no need to worry that the judge will confiscate your personal assets to cover the company’s debt.

Everyone thinks of the profits they will be making after starting a business with their awesome products and services and not things like bankruptcy. If you want to protect yourself from legal issues, then it is important to understand how bankruptcy works from a business point of view. But how does bankruptcy work? The following are some of the basics that you need to know.

Bankruptcy should be a last resort

This applies to both your finances and the company finances. Should your company land in murky waters and find yourself unable to pay your suppliers or clear the debts, it is important to try everything possible to resolve the debts before declaring bankrupt. It doesn’t matter what you do, whether you will have to close a few branches and cut down on the number of your staff, it is important to try and keep your company afloat. It might sound harsh but this is the reality of the business world.

How does bankruptcy work with Chapter 11?

Technically, there is no type of bankruptcy that can be termed good, but Chapter 11 is one of the best options. Under the watchful eye of an appointed trustee by the court, chapter 11 allows your company to remain open and offers you room for restructuring your business to run better and get more profits. So, if you think your business has a chance of reconstruction and rebuilding, then Chapter 11 is the best option.

However, if there is no hope for recovery, it is better to apply for Chapter 7. Chapter 7 liquidates all company assets and uses the money gotten from liquidation to clear as many debts as possible. This is applicable to both personal and small business bankruptcy.

Paying yourself becomes tricky

When you separate yourself from your company finances, you automatically become an employee of the company. Instead of relying on profits as a way of repaying yourself, you earn a wage from the company’s account like a normal employee. When a company is declared bankrupt, recovering pay that you missed in an effort to save the company is tricky.

This is because court considers you as one of the creditors and it’s their mandate to decide what you get. Do not try to pay yourself before filing for bankruptcy as the court will have to check your company’s payments and if you are listed in the ledgers, then they will demand you give back what you were paid so it can be distributed as per the decision of the court. You might also find yourself entangled into some legal trouble. You better accept the court and allow the court to handle it.

Always hire help

Both corporate and small business bankruptcy are complicated, it is always good to hire a profession lawyer to help navigate your company’s bankruptcy.

Finally, bankruptcy is not the end for your entrepreneurship, even after filing for Chapter 7 you can always learn from your mistakes and start something new, though it might take time, you will eventually recover.

Sourced from: businessblogs

Photo: Thinkstock/galdzer

Posted on February 15, 2023
Privacy Policy | Terms Of Use | Contact