Debtor FAQ's
Under what circumstances should a corporation be filed into
Chapter 7?
- To stop a creditor from executing on valuable assets that
could otherwise be utilized to pay favored creditors (e.g. trust
fund taxes, wage claims or personally guaranteed debt).
- To recover preference payments that could be used to pay
favored creditors.
- To help insulate the principals from allegations that the
liquidation of the entity was handled improperly.
- The principals would rather turn over liquidation of the
entity to a trustee rather than handle it themselves.
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