Due to COVID-19, we will be conducting all consultations either via video chat, phone, or email. Please don’t hesitate to contact us if you have any questions!


Business Bankruptcy FAQs

Bankruptcy is highly complex—especially when it involves businesses. Our team at Henry & DeGraaff is here to help you understand everything you need to know about business bankruptcy. We have compiled answers to some of the most common questions we receive, but please remember that this is intended as general information. For personalized recommendations and insights, do not hesitate to get in touch with our professionals.

Call (206) 483-0505 or contact us online to schedule your confidential consultation today.


  • Q:How will business bankruptcy affect my credit?

    A:If your business files bankruptcy, you can expect the bankruptcy to stay on your business’s credit report for many years. However, the effect of bankruptcy on your business’s ability to obtain new credit will diminish over time. If your business is struggling to turn a profit because of debt, filing bankruptcy will likely be worth the temporary effects it may have on your business’s credit. 

    You also might see an effect on your personal credit if you are personally liable for your business debts. This would be the case if your business is a sole proprietorship or general partnership. If your business is a limited partnership, LLC, or corporation, it will most likely shoulder all liability, so you generally won’t be personally responsible for business debts or take a hit to your personal credit score after your business files bankruptcy.  

    Our attorneys can provide a much closer analysis of your situation to help you understand all the potential effects of bankruptcy on your personal and business affairs.

  • Q:What types of bankruptcy can my business file?

    A:Bankruptcy options for businesses primarily include Chapter 7, Chapter 11, and Subchapter V of 11. However, you may file Chapter 13 if you are a sole proprietor, and you may file Chapter 12 if you are a qualifying family farmer or fisherman.

  • Q:Will my business survive bankruptcy?

    A:It depends. If your business files Chapter 7, the court will generally liquidate all assets to repay creditors. Some consider Chapter 7 a method of dissolving a distressed company in a transparent manner. 

    If you file Chapter 11 (or Subchapter V of 11), you will have much greater prospects of reducing financial obligations without going out of business. Chapter 11 is a form of debt reorganization, and, with assistance from our experienced team, your business may come out of bankruptcy stronger than before. Chapter 12 and 13 (if you are a sole proprietor or family farmer/fisherman) offer similar reorganization opportunities.

  • Q:Will I have control over my business during Chapter 11 bankruptcy?

    A:Business owners typically have to obtain court approval of certain decisions, but, in most cases, they can retain control and ownership of their companies as they reorganize.

  • Q:What type of bankruptcy is right for my business?

    A:To select the most appropriate chapter for your business, you will need to consider several factors.

    These factors may include:  
    • The value of your assets  
    • The type of debt your business owes  
    • Your short-term and long-term goals  
    • Whether your business can afford the costs of reorganization and repayment  
    • Whether you are personally liable for certain debts  
    • Whether your business meets the requirements for each type of bankruptcy  

    Some businesses will benefit more from one chapter of bankruptcy than another, and our attorneys can help you assess your options and determine the most appropriate way forward.

  • Q:Is it morally wrong to file bankruptcy?

    A:An unprecedented number of businesses are currently considering bankruptcy because of the economic ramifications of the COVID-19 pandemic. As a concept, bankruptcy is hundreds—if not thousands—of years old because society commonly believes in the honest debtor’s right to a fresh start. Whether you are facing bankruptcy because you could have made smarter decisions or because of events completely outside of your control, you have every right to take advantage of the U.S. Bankruptcy Code. There is no shame in using the assistance that is readily available to your business.

  • Q:How can a lawyer help me with my case?

    A:Professional legal assistance is not just helpful—it is critical to your success. An experienced attorney can help you anticipate obstacles, avoid common pitfalls, represent your best interests in an adversary proceeding, and much more. In general, you stand to gain much more by hiring a professional legal team than trying to save money by filing pro se.

The Henry & DeGraaff Difference

  • Experienced, Creative & Sophisticated

    With years of experience between our attorneys, our goal is to deliver a higher level of service, only taking cases where we can add value.

  • Personalized Attention

    We understand that no two cases are ever the same. We provide tailored solutions for every client and strategize in order to provide optimal results.

  • Comprehensive Service

    As a law firm that focuses on creative and collaborative solutions, we always seek opportunities that go even beyond the law to help provide the results you deserve.

  • Groundbreaking Results

    Our ability to tackle complex issues has allowed us to win appellate decisions and push the law in our clients' favor. We pursue compensation arrangements that reward success.

Contact Us

Schedule a Consultation Today
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.