Corporations can declare bankruptcy for a number of different reasons. While the reasons for bankruptcy are varied, a few things remain the same. One, a bankruptcies corporation does not mean that the shareholders are liable for the debt that was created.

This works in opposite too, if a shareholder declares bankruptcy, the corporation is not liable. A corporation is a separate entity than the shareholders and is considered an individual by those standards. This means that the business is responsible for its own debt and the repayment of this debt.Chapter 7 bankruptcy is one of the most common forms of bankruptcy for a corporation.

This form of bankruptcy sells the liquidation and repays the creditors with this amount. The earned wages after the case has begun are untouchable by the creditors. This form of bankruptcy destroys the credit of the corporation filing for it. At this point, the business is done. In order to restart a business, the corporation will need to file for a new business license and create a new business entity..

Chapter 11 bankruptcy is the reorganization bankruptcy. This form of bankruptcy allows a business to retain the assets and reorganize a payment method to get out of debt. The courts then bind the creditor and the debtor to this repayment method. This is one of the most common forms of bankruptcy for large businesses.

Chapter 11 bankruptcy allows the business to continue running business as usual and retain any profits over and above the repayments of the outstanding debts..

Chapter 13 bankruptcy is a repayment method for those who do not have enough debt and income in the company to file for chapter 11. This form of bankruptcy allows the business to continue operating and repay the debt over time. With the exception of chapter 7 bankruptcy, all of these bankruptcies can be recovered from by the business..

Company : Corporate bankruptcy