Can a 501 c 6 non-profit corporation file for Chapter 7 bankruptcy? 5 Answers as of April 01, 2011

Can a 501 c 6 non-profit corporation file for Chapter 7 bankruptcy?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Yes, but that then is the end of the corporation. Whatever your charitable purpose is, you would have to start over with a new 503c. Also, individuals may have guaranteed the debts. The debts would fall back on them.
Answer Applies to: California
Replied: 4/1/2011
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
What for? Just close and wind down the corporation. Be careful for any personal guarantees on any corporate debts as a personal bankruptcy may need to be filed.
Answer Applies to: California
Replied: 4/1/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
No, Chapter 7 is reserved for consumers and individuals who need debt relief.
Answer Applies to: New Hampshire
Replied: 4/1/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Yes, I believe any corporation can file Chapter 7. The question is: What is the benefit in doing so? Corporations do not receive discharges of debts in a Chapter 7 case. The main reasons any corporation files a chapter 7 are: 1. To have an independent trustee liquidate and disburse the assets of the corporation to the creditors, taking the principals of the corporation off the hook for doing so; 2. Getting notice out to all the creditors that the business is over and all that's left is whatever the Trustee gets; 3. To allow someone to purchase the assets of the corporation from the Trustee to use in another business. You should examine carefully the reasons for filing a Chapter 7 with a bankruptcy attorney in your area before making any decisions.
Answer Applies to: California
Replied: 3/31/2011
Bankruptcy Law Office of Robert Weed
Bankruptcy Law Office of Robert Weed | Robert Weed
There is almost never any reason for any kind of corporation to file a Chapter 7 bankruptcy. Is your 501(3) going out of business? Just shut it down. Some lawyers take a different view of this, so if you really want to file a bankruptcy, you'll find lawyers who will help you with it.
Answer Applies to: Virginia
Replied: 3/30/2011
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