Can a non-profit 501(c)3 organization file bankruptcy?
What are the details for a non-profit to file bankruptcy? How are debtors handled? Who is ultimately liable? Where do we start?
The hard economic times have hit everyone, profit and non-profits alike. The answer to your question is yes, the Bankruptcy Code allows a non profit organization to file for liquidation (Chapter 7) or reorganization (Chapter 11). It is really best for you to seek help from a qualified bankruptcy attorney in your area to discuss your options under the code and the methods for which these filings are handled. You need to make sure that you are protected legally as an employee of the non-profit as well. The code will have certain exemptions as well that you are entitled to as a non-profit and that are particular to your status. Get help. Good luck.