Feeling overwhelmed by debt? You’re not alone. Bankruptcy filings in the U.S. rose by 13.1% in the 12 months ending March 31, 2025. With commercial bankruptcies on the rise nationwide in 2025, many Texas business owners are turning to Chapter 7 as a way to close operations responsibly, deal with creditors, and move forward with dignity.
At Tittle Law Firm, PLLC, we know how difficult it is to step away from something you’ve built. Our experienced Chapter 7 bankruptcy lawyer, Brandon Tittle, helps business owners navigate this complex process with clarity, care, and precision.
Whether you’ve faced supply chain disruptions, unpaid receivables, lease defaults, or ballooning commercial debt, Chapter 7 may be your best option for winding down and protecting your personal exposure.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy allows a business to liquidate its assets and use the proceeds to repay creditors in a structured, court-supervised process when reorganization isn’t feasible. It can give Texas business owners a formal and efficient way to wind down operations, close accounts, and protect themselves from aggressive collection efforts. Unlike Chapter 11, there is no repayment plan, and unlike personal bankruptcy, there’s no means test for business filers.
If you’re ready to shut down a company that’s no longer profitable, our Chapter 7 bankruptcy lawyer can help you assess whether liquidation is the right move and guide you through every step.
How Does Chapter 7 Work for Businesses?
The Chapter 7 process begins when your attorney files a petition with the bankruptcy court, along with required financial disclosures. Unlike personal bankruptcy, there is no need for a business to complete a credit counseling course before filing. Filing a petition triggers an automatic stay, which immediately stops most collection efforts, including:
- Creditor phone calls and letters,
- Bank levies or asset seizures,
- Lawsuits, and
- Foreclosures or repossessions.
You’ll attend a meeting with an appointed bankruptcy trustee, called the 341 meeting or meeting of creditors. The trustee will review your company’s financials, ask clarifying questions, and begin identifying nonexempt assets to liquidate. This often includes inventory, equipment, or real estate in business cases. The business does not receive a discharge once the trustee liquidates available assets and distributes proceeds to creditors. Instead, the company is closed and dissolved through the bankruptcy process.
Our experienced Chapter 7 bankruptcy attorney will guide you through each step, explain your rights, and help you avoid costly mistakes.
Is Chapter 7 Right for Your Business?
Chapter 7 bankruptcy is often the best option for business owners who have decided to close their company and want to resolve outstanding debt in an orderly, legally protected way. Unlike Chapter 11, which companies can use for restructuring, Chapter 7 focuses on liquidation and closure.
There is no means test for businesses filing under Chapter 7. Instead, the court reviews your company’s financial records, asset structure, and whether liquidation is appropriate.
Here are a few signs that Chapter 7 might be right for your business:
- Your company cannot pay creditors, vendors, or leases as they come due;
- You’ve exhausted funding sources, and restructuring is no longer feasible;
- Legal actions, collections, or lawsuits are piling up; and
- You’re ready to shut down operations and resolve business debt cleanly.
If you’re weighing whether to wind down your business or file under another chapter, speaking with a Chapter 7 bankruptcy lawyer can clarify your next best step.
What Debts Are Dischargeable in Chapter 7?
Not all debts are wiped out in a business Chapter 7 filing. Still, the process can discharge many key liabilities, allowing business owners to walk away from burdensome obligations once the company is closed.
Commonly dischargeable business debts include:
- Business credit card balances and related interest or fees;
- Vendor accounts payable, including past-due invoices;
- Unsecured business loans, including lines of credit;
- Lease obligations for commercial property or equipment, if unpaid; and
- Personal guarantees, in some cases, though business owners may still be personally liable if they co-signed.
Debts that are generally not dischargeable include:
- Certain unpaid payroll taxes or trust fund taxes (e.g., withheld income or FICA taxes);
- Debts incurred through fraud or intentional wrongdoing;
- Court-ordered fines or penalties related to the business; and
- Secured debts, to the extent they are tied to collateral, unless that collateral is surrendered.
While some obligations may remain, Chapter 7 can help eliminate a large portion of unsecured business debt, making it easier for owners to move on and focus on rebuilding.
Pros and Cons of Chapter 7 Bankruptcy
Advantages of filing for Chapter 7 include:
- Fast debt relief. Most cases resolve in a few months, quickly giving you a clean slate.
- Stops creditor action. The automatic stay immediately stops lawsuits, collections, foreclosures, and repossessions.
- No repayment plan. Unlike Chapter 13, you don’t have to make monthly payments since debts are handled through asset liquidation.
- Winds down business operations cleanly. Chapter 7 offers an orderly path to closing the business, resolving outstanding debts, and moving forward.
The drawbacks include:
- Business closure is permanent. Chapter 7 filing typically results in the complete shutdown and dissolution of the business entity.
- Loss of business assets. The trustee may liquidate equipment, inventory, and other nonexempt property to repay creditors.
- Owner liability may remain. If the business owner personally guaranteed any debts, those liabilities may survive the business’s bankruptcy.
Despite these trade-offs, Chapter 7 can offer peace of mind and a structured exit strategy, especially when the business is no longer viable and debt has become unmanageable. Many people find that the benefits far outweigh the drawbacks, especially when guided by an experienced Chapter 7 bankruptcy attorney.
What to Expect from Tittle Law Firm, PLLC
At Tittle Law Firm, PLLC, we understand how overwhelming it feels to face serious debt. That’s why we treat every client with compassion, respect, and clear guidance.
Attorney Brandon Tittle brings over a decade of bankruptcy experience to every case. His background includes clerkships with two U.S. bankruptcy judges and advanced training in bankruptcy law. Brandon knows how to simplify the process and protect your rights when filing as a business.
Clients across Texas choose Tittle Law Firm, PLLC because we offer:
- Step-by-step support from the first consultation through case closure,
- Customized guidance based on your goals and financial situation,
- Clear explanations so you know exactly what to expect, and
- A strong track record of helping clients eliminate millions in debt.
Our goal is to help you make confident decisions and find lasting relief.
Talk to a Texas Chapter 7 Bankruptcy Lawyer Today
If you’re ready to reset your business’s finances and move forward, Tittle Law Firm, PLLC, can help. Brandon will take the time to understand your situation, explain your options, and guide you through the process. With extensive experience as a bankruptcy Chapter 7 lawyer for businesses, we’ll ensure you have the necessary tools and support.
Contact us today to learn how to regain control of your financial future.