How to File Corporate Bankruptcy
A corporation facing serious financial issues can end up in a position in which filing for bankruptcy is the only feasible and realistic option. If you are charged with determining what course a corporation needs to take, you need to understand how to file corporate bankruptcy. The process is not overly complicated. Generally speaking, a corporation has two options: a Chapter 7 or a Chapter 11 bankruptcy.
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Instructions
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Determine what type of bankruptcy is suitable in your situation. A Chapter 7 bankruptcy winds down the business of the corporation and liquidates assets and debts. A Chapter 11 bankruptcy permits the corporation to continue operations. Through Chapter 11, a corporation is able to reorganize and restructure its debt.
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Obtain the necessary forms for the type of bankruptcy selected. You can get these from the bankruptcy clerk's office, which oversees all bankruptcy court filings. Bankruptcy clerk offices are in federal courthouses.
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Complete the petition, the basic form that commences a bankruptcy case. In the petition, provide the basic information about the assets and debts as well as the revenue and expenses of the corporation.
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Prepare the matrix of creditors (called an index of creditors in some jurisdictions). The matrix of creditors is a master list of all of the creditors of a corporation. On the matrix, include all essential information about each creditor, including address, amount owed and the applicable account number.
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File the petition, matrix of creditors and related forms with the bankruptcy court clerk.
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Tips & Warnings
Use a Chapter 11 bankruptcy if at all possible. Through Chapter 11, you have the chance to run your business another day with the objective of turning it into a profitable enterprise.
A corporate bankruptcy is a complex undertaking, involving complicated laws and procedure. Therefore, the interests of your business and its shareholders generally are best served if you retain a qualified and experienced corporate bankruptcy attorney.
