Different Paths.
Different Legal Tools.
Compare objectives, control, creditor protection, and the limits of each approach. Evaluate cost and timing against the actual transaction and available funding.
Compare Two Paths
ABC vs. Chapter 7
When the business will close, compare the legal authority and funding needed to preserve value—not just the name of the process.
Comparison · Worked scenario · State context 02 / DECISION GUIDEABC vs. Chapter 11
A business can continue under a buyer even when its current entity winds down. Separate that outcome from reorganizing the existing company.
Comparison · Worked scenario · State context 03 / DECISION GUIDEReceivership vs. Bankruptcy
A receiver may stabilize particular property. Bankruptcy addresses an estate under a federal statute. Start by defining the property and relief the business needs.
Comparison · Worked scenario · State context 04 / DECISION GUIDESubchapter V vs. Traditional Chapter 11
Compare an eligible debtor’s Subchapter V election with the traditional Chapter 11 process, then test whether either can support the business plan.
Comparison · Worked scenario · State context 05 / DECISION GUIDEOut-of-Court Workout vs. Chapter 11
A viable operating plan is essential in either path. The key distinction is what can be achieved through consent and what requires bankruptcy authority.
Comparison · Worked scenario · State context 06 / DECISION GUIDEBusiness Dissolution vs. Bankruptcy
Compare the work that remains after the last trading day and identify the process that can address the actual obligations.
Comparison · Worked scenario · State contextWhich Paths Deserve a Closer Look?
Tell us about your goals, cash runway, creditors, and operating constraints. Get a tailored research shortlist, the tradeoffs that matter, and a preparation checklist.
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Scroll horizontally to compare all five columns →
| Approach | Primary objective | Control & administration | Collection protection | Key limitation |
|---|---|---|---|---|
| Assignment for the Benefit of Creditors | Sell assets or a going concern; distribute value | Assignee; court involvement varies by state | No federal automatic stay; state rules may apply | Liens, contracts, funding, and local procedure can control feasibility. |
| Business Chapter 7 | Liquidate a bankruptcy estate | Chapter 7 trustee | § 362 stay, subject to limits and relief | Entities receive no Chapter 7 discharge; owners’ guarantees remain separate. |
| Chapter 11 / Subchapter V | Reorganize or conduct a supervised sale | Usually debtor in possession; oversight varies | § 362 stay, subject to limits and relief | Needs funding and a viable statutory exit; Subchapter V eligibility is specific. |
| Negotiated workout | Preserve a viable company | Management, subject to negotiated terms | Only agreed or otherwise applicable restraints | Needs creditor cooperation and a funded operating plan. |
| Orderly dissolution | Finish affairs and close the entity | Authorized managers, liquidator, or other fiduciary | No stay merely from a dissolution filing | Must address creditors; does not erase debts or guarantees. |
| Receivership | Preserve, operate, or sell designated property | Court-appointed receiver | As provided by law and the court’s order | Powers and costs depend on the statute and appointment. |
Build the Decision File
Business Assets, Liens & Cash Collateral
Ownership, attachment, perfection, priority, and the use of encumbered cash during distress.
Contracts & OperationsBusiness Guarantees & Third-Party Exposure
How company debt, collateral, guarantees, and releases interact in a business workout or liquidation.
Assets & SalesDistressed Business Asset Sales: Creditors, Liens, and Proceeds
What happens to creditors when a distressed company sells assets? Compare sale routes, liens, assumed liabilities, and a worked proceeds example.
Build Your Decision File
Business Creditor Worksheet
A free editable creditor register with amount-status fields, claimed liens, deadlines, document references, and a field guide.
Preview the resource PDF FREE DOWNLOADClosing Down a Business: Wind-Down Checklist
A practical business closure checklist for before, during, and after shutdown, with an ungated PDF, evidence prompts, responsibility map, and unpaid-debt questions.
Preview the resourceSources & Authority
Read the governing text and agency guidance. Check effective dates and subsequent changes.