It is always sad to see a business close down, especially a long-standing, family-operated business, but sometimes a company has no other choice. If you own a business that is struggling, you have options, as well. There are three different bankruptcy options available to small businesses. There is Chapter 7 bankruptcy, Chapter 13 bankruptcy and Chapter 11 bankruptcy.
Chapter 7 bankruptcy is what a company in the neighboring state of Pennsylvania recently filed. Penn Refrigeration shut down last year in November and laid off 30 or more employees, which amounted to their entire staff. This year they filed Chapter 7 bankruptcy, choosing to liquidate their assets, pay their debts and call it quits.
Penn Refrigeration Service Corp, was a family-owned business that had been operating for 68 years. According to the company website, the hard economic times are to blame for the shutdown. By filing a Chapter 7 bankruptcy, they will be able to liquidate their assets to pay their remaining debts.
Companies that shut down are also sometime eligible to file for Chapter 13 bankruptcy, where they can reorganize their debts and pay them off over a set period of time. Chapter 13 protects you from debtors and also decreases the amount of debt owed.
Chapter 11 bankruptcy is commonly used by businesses who want to remain in business during and after the bankruptcy process. This type of bankruptcy allows companies to reorganize their debt, possibly liquidate some assets, and create a plan to eliminate remaining debt, while continuing to run the business as usual.
Filing bankruptcy is an option for New Hampshire businesses that are going underwater. Choose your best plan of action – shut down and liquidate to pay off debt, shut down and reorganize debt into a manageable amount, or reorganize debt and keep your business afloat, giving it a fresh start.
citizensvoice.com, “Penn Refrigeration files for bankruptcy” Denise Allabaugh, Oct. 10, 2013