What Happens When You File for Business Bankruptcy?
When it comes to the future of your business, filing for business bankruptcy might seem like the absolute worst thing that could happen. And, yes, it will show up on your credit report, which might put you at risk of getting rejected by certain long-term lenders. However, if you have to file for business bankruptcy is not necessarily a death sentence—in fact, it could mean the difference between sinking or saving your business. This is an option if you do not have a means to keep your business running, even with a restructure. Your creditors will be paid as much as your funds allow for, your assets will be sold, and a trustee will be appointed. This option for business bankruptcy is only available to sole proprietorships, i.e. businesses that are owned and operated by just one person. Fair warning—this option is not without its risks. But it’s the only option if you want to continue operating and restructure your LLC, corporation, or business you run with co-partners..