Call (303) 688-0944 or make an appointment online now for a free consultation with our small business bankruptcy attorneys.
Even business owners who start out with a viable business plan and high hopes for the future occasionally find themselves unable to pay their debts and facing bankruptcy. If you are a Colorado small business owner facing crushing debt and looking for a way out, you need to carefully consider your options with a knowledgeable bankruptcy attorney.
There are three types of bankruptcy to consider, depending on the legal structure of your business and your personal liability for your business debts. If you are organized as a corporation or LLC, your personal assets can be kept separate from your business bankruptcy, unless you have taken steps that put your personal resources in jeopardy. You can cause your personal assets to be pulled into the bankruptcy proceedings by doing such things as signing a personal guarantee in order to get a loan that the bank would not otherwise have given your business; using your personal credit cards or home equity line of credit to pay business expenses; or agreeing to put up your house, car, or other personal property as a guarantee.
Robinson & Henry has experience handling small business bankruptcies that involve personal guarantees and personal assets.
The three types of small business bankruptcy are:
Chapter 13 – Often the best option for many small business owners is Chapter 13. This chapter of bankruptcy cannot be filed in the name of your business since it is open only to individuals. There is no loss of assets with Chapter 13. However, you may be required to pay a portion of your debts over a set period of time (3-5 years). In order to establish your ability to meet this repayment criterion, you must be able to show six months of earning history that supports this. This type of bankruptcy is classified as a personal bankruptcy.
Chapter 7 – If your business is kaput and you have no hope of repaying its debts, Chapter 7 – business bankruptcy – is likely your best option. Much as with Chapter 13, you will need to show six months worth of earnings to prove, in this case, that you have no ability to repay your obligations. This bankruptcy is considered a liquidation. If your business does not have assets to speak of, this is certainly a viable option. Assets are sold to help repay your creditors with Chapter 7 bankruptcy, but you are often allowed to hold on to the “tools of your trade” which are vital to you earning a living.
Chapter 11 – This type of bankruptcy is typically not an option for a small business. This chapter of bankruptcy is also extremely expensive to file. Chapter 11 is considered a business reorganization and creditors generally get to vote on whether or not the debt reorganization is acceptable.
Contact Castle Rock’s Small Business Bankruptcy Lawyer
If you are struggling under overpowering debt and considering your best course of action to minimize damage to your financial future, contact the Colorado bankruptcy attorneys at Robinson & Henry. We will sit down with you for a free initial consultation to explore your options and help you decide your best course of action.
One note of caution you need to follow beginning today: Do not attempt to hide your assets with friends and relatives. Do not take out huge cash advances or pay your buddies off and leave other creditors in the lurch. The law is very clear about how your finances must be presented in a bankruptcy. Any hint of impropriety can result in you losing your ability to file for bankruptcy at all.
For expert help in navigating the complicated proceedings of a small business bankruptcy call 303-688-0944 and speak with the Castle Rock bankruptcy attorneys at Robinson & Henry today. We provide expert advice to small businesses throughout Douglas County, including Castle Rock, Centennial, Highlands Ranch, Greenwood Village, and throughout the south metro Denver region.