A corporate debtor does not receive a discharge under Chapter 7, but can still file. As a result, the corporation becomes a shell with no assets, no ongoing or running business, and an accumulated unpaid debt. The now-defunct corporation may want to de-registered under state corporation law. If the company does not de-register under state law, the existence of the undischarged debt creates a strong disincentive to anyone who wishes to revitalize the business shell. If a business wants to reorganize and continue to operate, it may want to consider filing for Chapter 11. Our attorneys can tell you more about the benefits of Chapter 11 in a consultation.
