If you hear that a business bankruptcy is a Chapter 11 then keep your chin up as there is still some hope. If a business bankruptcy is a Chapter 7 then you should probably pack your desk and get your resume together because it is pretty much over.

1. Business Bankruptcy
By Treesa Kintrick
http://www.BankruptcyResourceCenter.com

2. Business Bankruptcy - Some Useful Information
When a business goes bankrupt then lives are affected and some lives can be ruined. If
the business was not incorporated then the bankruptcy affects the personal assets of the
owner as well as the lives of the people that worked for the company that no longer have
a job. A business bankruptcy is a pretty traumatic event and it can usually come in two
different types. Most companies that experience a business bankruptcy do so through a
Chapter 11 and a Chapter 7. If you hear that a business bankruptcy is a Chapter 11 then
keep your chin up as there is still some hope. If a business bankruptcy is a Chapter 7 then
you should probably pack your desk and get your resume together because it is pretty
much over.
Chapter 11
Most people that experience a business bankruptcy will try a Chapter 11 before they try
anything more severe. A Chapter 11 business bankruptcy is a long and drawn out process
that first looks at the assets of the company and the income the company is generating.
The court comes up with a plan to use the company's assets and income to begin paying
back creditors and restructures the company to assist the company in paying back the
debt it owes. With the court on its side the company can bypass certain payment rules and
the creditors must agree to work the company in some way if they are to get any of their
money back. The creditors are usually asked to make concessions that allow the company
to pay back its debt but at a greatly reduced value.
The company and the court then agree on a plan that will allow the company to still exist
in its day-to-day operations but under the supervision of the court. The company will
attempt to create a plan that will allow them to become profitable, pay off existing
creditors, and maintain relationships with suppliers that are beneficial to both sides and
profitable for the company. The court must approve everything the company does and
will remain as a monitor for the company until all of the plan goals are met and the
company can effectively emerge from Chapter 11 with a new start. A business
bankruptcy done this way can work but it should be noted that many companies that
emerge from Chapter 11 eventually wind up going out-of-business.
Chapter 7
A Chapter 7 business bankruptcy is a lights-out bankruptcy where the court will
discharge some of the company's debt and then order all the assets of the company to be
liquidated to satisfy as much of the remaining debt as it can. When a company files
Chapter 7 then that the company will sell its assets off and go out-of-business. Chapter 7
is not meant to help a company restructure its debt.
For more information on business bankruptcy visit:
http://www.BankruptcyResourceCenter.com