Filing for bankruptcy as a business owner can be difficult, especially if you’re not sure if you want to keep your business for several more years. For many business owners, the question of whether they can sell their business even though they’re working through a bankruptcy debt repayment plan is likely to come up. Selling a business during bankruptcy is possible. However, there are a few things your Wisconsin business bankruptcy attorney wants you to know before you put your business on the market.
It Depends on the Type of Bankruptcy You File
The ability to sell your business during bankruptcy largely depends on the type of bankruptcy you file.
- Filing Chapter 7: In Chapter 7 bankruptcy, your business will be liquidated to settle your debts, meaning there won’t be a business to sell.
- Filing Chapter 11: Chapter 11 bankruptcy lets you enter into a debt repayment plan with your creditors instead of discharging your debts entirely, meaning your business stays open and you retain ownership of it and most of your assets. In this form of bankruptcy, you may be able to sell your business.
If you’re considering bankruptcy, speak with an experienced Wisconsin business bankruptcy attorney to learn more about your options and to identify the best form of bankruptcy for your situation and goals.
Why Selling May Be a Good Choice
Selling a business that’s going through bankruptcy may be a good choice for some business owners, but it all depends on your situation. Here are a few benefits you may see if you choose to sell:
- Assets are sold without liens: You won’t be passing on the business’s debt to the new buyer, and you can use the proceeds of the sale to settle debt with your creditors.
- You may maximize returns: Selling your business during bankruptcy could help you maximize the returns on the sale. This could help your creditors get more of what they’re owed and may be viewed more favorably.
- You’ll avoid the hassle of running the business: It’s normal to just want to walk away from your business after your finances take a hit. By selling the business, you may be able to walk away and start over.
It’s a good idea to speak with your attorney as soon as you’re interested in selling. They’ll help you make sure it’s the right fit for your needs.
What to Consider Before Selling
Ultimately, you’ll need to get the court to approve of the sale before you can start entertaining offers. This means you’ll need to get your business valued and have a plan to disclose all relevant information to prospective buyers.
You’ll also want to consider how selling will ultimately impact your finances. Remember, if you file for Chapter 11 bankruptcy, you can keep your business open and potentially earn an income while still repaying your debts. This means you have the chance at better financial security than you might if you sell the company that you worked so hard to build.
Do You Need to Work With a Wisconsin Business Bankruptcy Attorney?
Working with a Wisconsin business bankruptcy attorney may not be legally required but it’s always a good idea, whether you’re filing or are just exploring your options. This is especially true if you’re thinking of selling your business during bankruptcy. Your attorney will help you understand your options, can help you find a reliable organization to value your business, and make sure you’re in full compliance of the bankruptcy court’s orders every step of the way.
Schedule a Consultation Today
If you’re thinking of filing for bankruptcy or you’ve started the process but want to sell your business, make sure you have an experienced Wisconsin business bankruptcy attorney on your side. Contact us today to schedule a free consultation and let our team help.
