Business Bankruptcy Options

Business and Commercial Bankruptcy

Debt is not an issue that is exclusive to consumers, as businesses can also be buried in debt and need legal help to get out from under it. While the best business and commercial bankruptcy options will depend on the nature of a business’ debt, as well as whether the business owners want to keep that business operational following bankruptcy, in general, business bankruptcy options include Chapter 7 bankruptcy or Chapter 11 bankruptcy (and, occasionally, Chapter 13 bankruptcy).

Below is a closer look at each of these different business and commercial bankruptcy options. When you are ready to get more specific information regarding the best debt relief solutions for your business, it’s time to contact the experienced Colorado Springs bankruptcy attorneys at the Law Office of Jon B. Clarke, P.C.

Business and Commercial Bankruptcy: Chapter 7

Colorado Springs Bankruptcy attorney Business Bankruptcy Options

Contact our trusted Colorado Springs business bankruptcy lawyers for experienced help resolving your business’ debt issues.

Referred to as liquidation bankruptcy, Chapter 7 bankruptcy for businesses allows those enterprises to liquidate – or sell off – their assets to resolve their debts. In general, Chapter 7 for businesses proceeds similarly to Chapter 7 for individuals/consumers, with the process proceeding as follows:

  1. A Chapter 7 business bankruptcy petition is filed with the bankruptcy court.
  2. The court orders an automatic stay, protecting the business from any and all collection actions being pursued by the business’ creditors.
  3. The court appoints a trustee to oversee the case, including the sale of the business’ assets to satisfy its debts (to the extent possible).
  4. When the bankruptcy case is finally closed, the business will usually cease to exist, as it has no remaining assets.

This means that, typically, Chapter 7 bankruptcy for business can be a good option for business owners who want to resolve their business’ debt issues and who are not interested in keeping the business operational through and/or after the bankruptcy case.

Business and Commercial Bankruptcy: Chapter 11

In contrast to Chapter 7, Chapter 11 bankruptcy for businesses can allow enterprises to resolve their debt issues while remaining operational throughout and after the bankruptcy proceedings. With these types of business and commercial bankruptcy cases, the process generally moves forward as follows:

  1. A Chapter 11 business bankruptcy petition is filed with the court.
  2. Once this petition has been filed, an automatic stay immediately goes into effect, protecting the business from creditors’ collection actions.
  3. The business owners(s) will then have some time to develop a “reorganization plan,” which should propose a plan for continuing the operations of the business while satisfying the business’ debt obligations (over a specific time frame).
  4. Once this plan has been developed, it will have to be submitted to the court for review and approval (this process will involve input from the business’ creditors).
  5. If approved by the court, the business can move forward with the plan. If not, a new plan may need to be developed; the case may be converted into a Chapter 7 case; or the case may be dismissed.

Contact the Colorado Springs Business Bankruptcy Lawyers at the Law Office of Jon B. Clarke, P.C.

Are you ready to find out which business and commercial bankruptcy option is right for your company? If so, the experienced Colorado Springs business bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C. are ready to talk to you. Contact us today by calling (303) 779-0600 or by emailing us using the contact form on this page. We also encourage you to complete our Business or Consumer Debtor Analysis Form so that we can provide you with detailed professional advice.

From our offices based in Denver and Greenwood Village, we provide the highest quality debt relief services to people and businesses throughout Colorado.