Closing and continuing are different cases
A business bankruptcy usually follows one of two directions. Chapter 7 hands the company to a trustee who sells assets and distributes the proceeds, and it suits a business that will not continue. Chapter 11, including the Subchapter V track for smaller companies, lets the business keep operating while it restructures; Subchapter V has a debt ceiling, so larger companies use the traditional process. A corporation or LLC that goes through Chapter 7 does not receive a discharge, so the case ends the company rather than freeing it. A sole proprietorship is different, because the owner and the business are the same person and the owner files individually.
Where the owner stands personally
Many owners are more exposed than the company. Personal guarantees on leases, loans, and merchant cash advances usually survive the company's case, and creditors can pursue the guarantor directly. Unpaid payroll taxes withheld from employees can also become a personal liability for the people responsible for paying them. Gather the loan documents, leases, guarantees, recent tax filings, and a list of every creditor and amount owed. Avoid moving assets, paying off insiders, or closing accounts in a hurry before getting advice, because those steps are often examined later.
What gets decided at the first meeting
We look at whether the business has a viable core, what its assets are worth, and how secured lenders and landlords are likely to react. If closing is the right answer, we discuss whether a bankruptcy case, an assignment for the benefit of creditors, or a negotiated wind-down fits better. If continuing is possible, we discuss which reorganization track is available and what it would cost to run. We also plan for the owner's personal exposure alongside the company's case, and notices from taxing authorities get early attention because tax debts follow their own rules in bankruptcy. You leave with a sequence of steps and a sense of which ones cannot wait.
