Bankruptcy can breath new life into a business, whether through a Chapter 11 business bankruptcy or a Chapter 7 or Chapter 13 bankruptcy filed by a business owner.
Colorado Springs Bankruptcy Attorney Stephen H. Swift is committed to helping small business owners use bankruptcy laws to get back on their feet. We serve clients in in Colorado Springs, Pueblo, Denver or throughout the area.
Chapter 11 Business Bankruptcy v. Personal Bankruptcy
A Chapter 11 Bankruptcy, sometimes called a reorganization bankruptcy, is typically used by mid- and large-sized corporations dealing with cash-flow issues or unmanageable levels of debt. It is not unlike a Chapter 13 bankruptcy by an individual, in that it allows a business to continue operating while formulating a plan to deal with outstanding debts.
Corporations, limited liability companies and partnerships can also file a Chapter 7 bankruptcy in their own right. This can be the best option when a business has no future or when it has few assets that cannot be reproduced after bankruptcy. If a leased storefront, or leased equipment, will get the job done, filing Chapter 7 and making a fresh start may be the best course of action when dealing with significant debt levels.
But when it comes to most small and mid-sized businesses, the debts of the business and the debts of the owner are one and the same. This is particularly true for sole proprietorships and businesses operated as disregarded entities for tax purposes.
In such cases, dealing with the debts of the owners can give a business its best chance for survival. In some cases, that may include a Chapter 13 filing. In other cases, a Chapter 7 filing may be the best way to make a fresh start.
Personal and Business Bankruptcy in Colorado Springs
Whether a business should reorganize or liquidate depends on a host of factors.
- Market: Reorganizing can’t create a market that isn’t there or isn’t sufficient to support an existing business.
- Revenue: filing for bankruptcy will not increase revenue.
- Owners: A bankruptcy will not address the abilities or interests of current ownership, or deficiencies.
- Cashflow: Filing for bankruptcy WILL improve cash flow by reducing debt.
- Liabilities: Bankruptcy can also address issues of pending liability in pending or rendered lawsuits.
For those struggling to keep a viable business afloat amid a mountain of debt, filing for business or personal bankruptcy in Colorado Springs can provide a lifeline. Too often, business owners labor for years under startup debt, or debt incurred during an economic downturn. By proactively managing debt levels using federal bankruptcy laws, you can turn the page and seek a fresh start.
These are complex matters and should be discussed with an experienced lawyer. Each case is unique. If you are a business owner considering bankruptcy, call the Law Office of Stephen H. Swift for a free initial consultation to discuss your situation, your rights and how bankruptcy may be right for you.
Colorado Springs bankruptcy – 866-893-2440 or 719-520-0164 – legal consultation
