My online business grew fast, but a string of bad events led us to take several MCA loans with personal guarantees. Sales have not recovered, the business has minimal assets, and we are considering business Chapter 7 plus personal Chapter 7 for the owners. Is it better to shut the business down first or file before closing?
Do not decide the order casually. Closing before filing can affect assets, receivables, employee obligations, leases, transfers, creditor actions, and how the bankruptcy estate is handled. Filing before closing can also create operating restrictions and trustee involvement. With MCA personal guarantees, you need to coordinate business liability, personal exposure, UCC collateral, and any remaining receivables. Before shutting down, ask counsel to map the consequences of closure, asset sales, final payroll, taxes, customer deposits, and any payments to MCA funders or insiders.