Find Out How to Leverage Business Bankruptcy and More to Put Your Business Troubles In the Rearview Mirror
The fact that you own a small business is an incredible thing. It’s honorable to take the risk of stepping out on your own to do something you believe in to improve your life and those around you.
That’s why it can be challenging when your business is struggling. This was never supposed to be the plan. No business deserves to go through financial troubles. No one wants to worry that their business debt is going to come back to haunt them personally, either.
However, you don’t have to give up hope. Small-business bankruptcy attorneys can help you find the best way to deal with your business debt with the help of bankruptcy law, including Chapter 7 and Chapter 13 bankruptcy, as well as debt settlement.
Where to Start to Get Cost-Effective Debt Relief
Whether you operate your business as a sole proprietorship or your business is a limited liability corporation (LLC), it’s important to understand that your business debt is your debt. Although many business owners would like to believe that they are protected from their business debts, that isn’t the case. You are still liable for business debt, as your loans were very likely personally guaranteed. This applies to business loans, Small Business Administration (SBA) loans, merchant cash advances, your business lease, and more.
However, you can restructure your business as a sole proprietorship so you can manage your debt and business debt with personal debt relief solutions, including Chapter 7 bankruptcy, Chapter 13 bankruptcy, and debt settlement. Those who already run their business as a sole proprietorship are simply a step ahead toward continuing their business, while also benefiting from debt relief.
Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and Debt Settlement Can Help Solve Your Business Debt Troubles
Personal bankruptcy through Chapter 7, Chapter 13, and debt settlement are three of the most cost-effective ways to settle your business debt, depending on your particular circumstances.
- Chapter 7: Chapter 7 bankruptcy is an effective solution to discharging your business debt with minimal legal fees. To qualify for Chapter 7, your household income must fall beneath Colorado’s income threshold, otherwise known as the state’s median income. If you make less than this amount, you can file for Chapter 7 and see your unsecured debt disappear, including credit card debt, debt on your business leases, business loans, and more. Keep this in mind: if a business owner has a net-positive income (you have money left over after all of your expenses), you don’t qualify for Chapter 7 bankruptcy. However, with the help of The Wink Law Firm, you can demonstrate during your bankruptcy proceedings that your debt is primarily business debt (also known as non-consumer debt). We can also help you exempt $60,000 worth of your business assets, including equipment, machinery, and more.
- Chapter 13: If your income is higher than the income threshold for Chapter 7 bankruptcy, Chapter 13 bankruptcy is an excellent solution that requires you to pay your debt on a three-to-five year plan. After that time, your business debts will be discharged. One of the key benefits of this approach is that you are legally able to pay on the current value of assets for which you owe money. Consider this example: if you paid $5,000 for a piece of equipment, but you now owe more on that equipment due to interest and fees because of your failure to repay, your debt can be restructured to the amount that equipment would be worth today as a depreciated asset.
- Debt settlement: Debt settlement may be your best solution, depending on what kind of debt you owe and whether your creditors are willing to accept a settlement. Typically, it is easier to settle on unsecured debt, such as credit cards and medical bills, because they aren’t attached to assets, like equipment, machinery, or other materials. If you have a lump sum payment you can offer to your creditor, a business bankruptcy attorney at The Wink Law Firm can help you settle for 50% of what you currently owe, and you can continue to operate your business.
You may also be curious about Chapter 11 bankruptcy or subchapter 5 bankruptcy as a solution for business debt. This legal strategy is usually not recommended for most clients because it simply isn’t cost-effective.
If your goal is to avoid significant legal fees and move on to a future free of debt, it is important to know that a Chapter 11 bankruptcy filing is expensive. If you attempt to file for business bankruptcy, but you’re personally liable for your business debt, you would have to file for both personal and business bankruptcy, which would double the fees.
Get Help For Your Small Business Debt With Our Team
Our goal at The Wink Law Firm is to ensure you get the best available legal representation from our business bankruptcy attorneys. You deserve to have a team on your side that understands why your business matters so much to you, and why you want the best possible outcome.
Businesses aren’t always as successful as we expect them to be. However, that doesn’t mean that you can’t find an affordable debt relief solution that can empower you to take the next step forward in your business life and thrive in the future.
We look forward to helping you through this difficult time. Schedule a free consultation by calling (720) 523-0620 or by sending us a message online.