A Utah small business can file for either Chapter 7 or Chapter 11 bankruptcy, depending on the specific circumstances of the case.
Chapter 7 bankruptcy is typically used by businesses that are no longer viable and need to liquidate their assets to pay creditors. In a Utah Chapter 7 bankruptcy, a Utah trustee is appointed to oversee the liquidation of the Utah business’s assets, and the proceeds are used to pay creditors. After the assets are sold and the creditors are paid, the business is dissolved and no longer exists.
Chapter 11 bankruptcy, on the other hand, is designed for businesses that want to reorganize their finances and continue operating. In a Chapter 11 bankruptcy, the business can propose a plan to restructure its debts and operations, which must be approved by the bankruptcy court. The plan may involve reducing or modifying the business’s debts, renegotiating leases and contracts, and other measures to improve the business’s financial situation.
It’s worth noting that while Chapter 11 bankruptcy is often used by large corporations and businesses, it can also be used by small businesses that need to restructure their finances and operations. The specific type of bankruptcy that a business will file depends on the specific circumstances of the case and the goals of the business.
If you are a Utah business owner and are considering bankruptcy, it’s a good idea to consult with a Utah bankruptcy attorney to understand your options and to ensure that you make the best decision for you, your business and your financial future.
The team at the Utah Bankruptcy Guy has 20+ years experience helping small business owners in Utah get relief from their creditors. We offer a low-cost consultation to visit with our attorney and review your business and it current financial status. Give us a call we have limited time slots each week reserved just for Utah small business bankruptcy.