BANKRUPTCY FOR SMALL BUSINESS LAWYERS IN WESTMINSTER, CO
2020 has been an extremely challenging year for small business owners and entrepreneurs across the country. According to a survey by Main Street America, about 7.5 million small businesses, out of nearly 30 million small businesses throughout the United States, may be at risk of permanent closure due to the COVID-19 pandemic. If your business has experienced financial strife due to the COVID-19 pandemic, or you are struggling with debt for other reasons, filing for bankruptcy may be a potential solution for your situation.
At Garcia & Gonzales, P.C., our team of attorneys is dedicated to providing experienced legal guidance and reliable representation to individuals and small business owners on all bankruptcy-related matters. As your legal counsel, we can offer you the detailed counsel and advocacy you need to navigate the complexities of business bankruptcy. Our attorneys will be available to discuss your unique situation and help you understand all of your legal options. Garcia & Gonzales, P.C. is proud to serve clients throughout Westminster, Colorado, and the surrounding communities of Denver, Aurora, Boulder, and Northglenn. Reach out to our firm today to schedule a one-on-one consultation with an experienced Colorado bankruptcy attorney so that you can begin your path towards financial freedom.
WHAT TO CONSIDER WHEN
FILING FOR BANKRUPTCY
Building a business requires years of hard work, financial planning, and a relentless work ethic. Unfortunately, seeing the business struggle leaves many business owners feeling stressed and unsure of what to do next. Thankfully, filing for bankruptcy can afford you the time you need to restructure your business and help you achieve the financial fresh start your business deserves. However, before choosing the bankruptcy chapter that best fits your needs, it is important to consider a number of different factors, including what type of business structure you have and your plan for the business moving forward.
CHOOSING THE RIGHT
MODEL FOR YOUR BUSINESS
When thinking about filing bankruptcy, you need to consider the legal structure of your business. Most business models follow one of the three common business structures:
As a sole proprietor (or small business owner), you have complete control over the business. You receive all profits and pay taxes. As the sole owner of your business, all of your personal assets can be exposed to liability.
A partnership consists of an association of two or more individuals who serve as co-owners of a business. Typically in a partnership, both partners will be liable for any business liabilities and debts, as well as the actions of the partnership.
LIMITED LIABILITY COMPANY (LLC)
A limited liability company, often referred to as an LLC, offers corporate protection to its members. This means that the LLC's members will not be held responsible for the company's debts.
DEVISING A PLAN FOR YOUR BUSINESS MOVING FORWARD
Your plan for the business moving forward can also help determine the right bankruptcy option for you and your small business. While there are a number of different questions to consider when outlining a business plan while you navigate the bankruptcy process, some of the most crucial points to consider include:
Do you want to close down the business completely?
Do you need time to rebuild and restructure while still keeping the business afloat?
BANKRUPTCY OPTIONS FOR
YOUR SMALL BUSINESS
If your business is struggling with debt, you’ll have a few different legal options you can pursue through the process of bankruptcy to help provide some financial relief. These potential bankruptcy options include:
Chapter 7 bankruptcy, often referred to as "liquidation" bankruptcy, helps small business owners eliminate most of their general unsecured debts and achieve a financial “clean slate.” As a sole proprietor or business owner, you and your business will be treated as one.
PROS OF CHAPTER 7 BANKRUPTCY
You can discharge some of your unsecured debt, including personal and business debts.
It will protect both personal and business assets using bankruptcy exemptions.
It can eliminate your debts and personal liability, allowing you to continue operating your business.
CONS OF CHAPTER 7 BANKRUPTCY
Chapter 7 bankruptcy is typically not considered a favorable option for a partnership or LLC. These business structures don't allow you to discharge debt. Thus, filing for Chapter 7 bankruptcy can only increase the level of liability that the co-owners or members take on.
Chapter 11 bankruptcy, often referred to as "reorganization" bankruptcy, allows small business owners to reorganize their business affairs, debts, and property. Chapter 11 allows debtors to propose a repayment plan to pay back any creditors while they keep the business running.
PROS OF CHAPTER 11 BANKRUPTCY
Almost any business can file for Chapter 11 bankruptcy
It allows you to retain essential assets required for operating your business
It gives you time to sell properties that are not needed or expensive to keep
It allows you to modify payment terms on secured debts
You can discharge obligations that can't be paid through the repayment plan term
It is suitable for both partnerships and LLCs
CONS OF CHAPTER 11 BANKRUPTCY
Filing can be an expensive and lengthy process.
Any repayment plan must be approved by the court or creditors.
In Colorado, filing for chapter 13 bankruptcy involves proposing a repayment plan to pay down your debts. Chapter 13 allows business owners to reorganize and repay all or some of their debts through a repayment plan that is spread across a period between three and five years.
PROS OF CHAPTER 13 BANKRUPTCY
Filing for Chapter 13 is significantly cheaper than Chapter 11.
The plan approval process is quicker
More debts can be discharged through Chapter 13
CONS OF CHAPTER 13 BANKRUPTCY
Available only to sole proprietors who file as individuals
Debt limitation is often extremely low
Limited to five years
All disposable income must be diverted into the repayment plan
While there are a number of different circumstances that should be taken into consideration when deciding which form of bankruptcy is right for you and your business, your business structure and plan for the business moving forward can go a long way towards helping you determine the bankruptcy option that is right for your situation.
WORK WITH EXPERIENCED BANKRUPTCY ATTORNEYS IN WESTMINSTER, COLORADO
Government regulations and business interruptions have forced many small businesses and their owners into crippling debt, with many being forced to close permanently. Despite what you may think, filing for bankruptcy when facing financial hardships can help you restructure your business and provide you and your business with the relief you need. If you're considering filing for bankruptcy, it is imperative that you consult with a knowledgeable Colorado bankruptcy attorney as soon as possible for detailed guidance and support.
At Garcia & Gonzales, P.C., our law firm is committed to guiding small business owners through the bankruptcy filing process. As experienced bankruptcy attorneys, we will review the details of your case, evaluate your unique financial situation, and help you understand all of your legal options so that you can take your first steps toward financial freedom. Our attorneys will help with filing your forms, documentation, and help you navigate every critical decision along the way. As your legal counsel, we will offer you the detailed legal guidance and comprehensive representation you need from start to finish, answering all of your questions at every turn. Don’t try to navigate these challenges on your own. Reach out to our firm today to schedule a one-on-one consultation and learn how we have helped countless other business owners just like you.
SKILLED BANKRUPTCY ATTORNEYS SERVING WESTMINSTER, CO
Are you experiencing financial adversity and considering filing for bankruptcy? Contact Garcia & Gonzales, P.C. today to schedule a one-on-one case assessment. Our experienced bankruptcy attorneys can offer you the skilled legal counsel and advocacy you need to navigate the complexities of your bankruptcy proceedings. Our firm proudly serves clients in Westminster, Aurora, Boulder, and Northglenn, CO, so reach out today for help!